The Trump administration insists that its naval blockade is putting the squeeze on Iran and that the regime is just a “matter of days” away from an energy crisis unless it capitulates.
Energy experts are skeptical and say the White House is misreading both the timing of the harm to the Iranian oil industry as well as the regime’s tolerance for pain.
The standoff comes as benchmark oil prices hit a four-year high Thursday while the average price at the pump jumped to $4.30 a gallon, up 27 cents in the last week. Democrats, eager to press their advantage, are exploiting public anger at rising costs while a top Republican super PAC warned Thursday that the Senate majority was at risk because of voters’ cost-of-living concerns.
Still, the White House officials insist that the U.S. naval blockade of the Strait of Hormuz — through which roughly 20 percent of the world’s global oil and natural gas supplies are shipped — is crippling Iran and will soon leave the regime little choice but to meet President Donald Trump’s demands.
“If you look at the economic stress that the Iranian people are under right now, it should be unacceptable to any civilized leader,” White House economic adviser Kevin Hassett told reporters Thursday.
The regime, according to Treasury Secretary Scott Bessent, is “days” away from running out of storage capacity and before “fragile Iranian oil wells will be shut in.” Trump, on Wednesday, told Axios that Iran’s storage facilities and pipelines “are getting close to exploding.”
Bessent wrote on X that Iran “is soon nearing storage capacity, which will force the regime to reduce oil production, resulting in an additional approximately $170 million per day in lost revenue, and causing permanent damage to Iran’s oil infrastructure.”
But energy experts such as Robin Mills, CEO of Qamar Energy and a former consultant for the European Union in Iraq, said Iran has far more storage capacity than administration officials are claiming and that the slow-burn blockade strategy only guarantees a prolonged energy disruption that will further crush the global economy.
“They’re not in a mood to surrender,” he said. “They know the clock is ticking not just for them, but for the U.S. and the rest of the world economy, too, and they think their clock is ticking slower.”
Meanwhile, the Iranians are mocking the administration’s focus on storage and production capacity. Iranian Parliament Speaker Mohammad Bagher Ghalibaf, who has been a key part of the negotiating team, said there is no risk of “exploded” wells.
“3 days in, no well exploded,” he wrote on X. “We could extend to 30 and livestream the well here. That was the kind of junk advice the US admin gets from people like Bessent who also push the blockade theory and cranked oil up to $120+. Next stop:140. The issue isn’t the theory, it’s the mindset.”
While, it’s clear that the U.S. blockade is crushing the Iranian economy, oil storage is a separate issue and one Tehran is not expected to deal with until late May and possibly even longer, according to Gregory Brew, a senior analyst at Eurasia Group, specializing in the geopolitics of oil and gas with a focus on Iran. Even then, Iran has a long history of enduring punishing conditions to achieve war objectives.
“We would need to see the blockade maintained and aggressively enforced for another month before they start to have to reduce production,” he said.
For now, Iran has about 20 days of onshore storage left, according to Kpler, an energy research firm. It can also still make use of empty crude oil tankers offshore that can’t get out of Hormuz. According to TankerTrackers.com, one of the world’s leading ship monitoring firms, the Iranians have up to six weeks of storage capacity left, just based on the empty tankers that are already in the gulf.
And while the blockade is clearly “hurting Iran where it hurts” in terms of driving inflation, the real financial pressure “would only impact Iran’s oil revenues 3-4 months from now, limiting its effectiveness,” Kpler analyst Homayoun Falakshahi wrote. At that point, Iran’s oil revenues would be reduced by up to $250 million a day, he noted.
A White House official, speaking on background, said Iran was losing $500 million a day.
“The blockade has put incredible economic pressure on Iran, which has given US negotiators all the leverage as they work to make a deal,” the White House official noted.
Iran has repeatedly shut-in wells due to various crises over the years and knows how to avoid catastrophic damage to its production, said Mills of Qamar Energy. After the blockade is over — even if it has shut in many of its wells — the country is likely to immediately resume about 70 percent of its production and reach capacity within months, he said.
“I don’t believe this will cause catastrophic or even damaging effects on the Iranian oil industry,” he said. “They’ve shut down production significantly before and they did that without wells and pipelines exploding.”
