Iran’s oil storage capacity is reaching the point of no return

Iran is running dangerously low on oil storage capacity and could face a severe economic breaking point if forced to halt production, a former U.S. energy official warned Wednesday on Fox News. “I’d say they’re about four to six weeks away and then it’s the point of no return”, former U.S. Energy Secretary Dan Brouillette said.

According to Brouillette, observations indicate Iran now has only about 20 million to 22 million barrels of available onshore storage remaining, a sharp drop from the roughly 120 million barrels that Iran typically maintains in reserve capacity. If Iran exhausts its storage capacity and is forced to halt oil production, restarting those operations could prove extremely difficult and potentially threaten the country’s long-term economic stability.

“They’re going to have to start shutting in production. And what that is gonna entail over a longer period of time, if it lasts too long, is that they can’t reopen those wells very easily. It’s very difficult once you’ve shut in this well to have it come back to the production levels that it was prior to the shut-in. And what means is their long-term economic future is going to be endangered”, Brouillette said.

He added that President Donald Trump is likely aware of the mounting pressure on Tehran, suggesting the administration is deliberately playing a long game with what Brouillette described as an increasingly effective blockade strategy. “This blockade is working very, very well. Their exports are down. Their production numbers are down. Their storage is filling up. So, they’re reaching a danger zone and a point here in which there is no return. And the president knows that and I think he’s playing that card pretty effectively”, Brouillette said.