Iran faces production cuts as oil loadings drop sharply amid US blockade

Iran’s oil sector is absorbing one of the most severe shocks in years. Vessel-tracking data shows Iranian crude and condensate loadings averaged just 220,000 to 260,000 barrels per day in August 2026, compared to 1.7 to 2 million barrels per day a year earlier. That is an over 80% collapse in export volumes, measured not in some theoretical worst-case model but in actual ships moving actual oil. The proximate cause is a US naval blockade at the Strait of Hormuz, reinstated in mid-July 2026 after a brief easing that followed a short-lived peace agreement in June. Since the blockade went back up, tracking reports show no confirmed Iranian crude cargoes have successfully passed the enforcement line. From storage glut to storage crisis Floating storage, the tankers sitting offshore loaded with unsellable crude, has dropped from roughly 90 million barrels in mid-July to about 29 million barrels as of mid-September 2026. Iran is drawing down those reserves to meet domestic needs and satisfy whatever residual exports it can manage, not because it found new buyers. With nowhere to put new output, the National Iranian Oil Co. has been forced to dial back production. Analysts estimate that i...