Iran Could Lose Its Seaborne Oil Income by Mid-December Under the U.S. Blockade, but Analysts Say the Military May Be Shielded From the Squeeze

Iran is heading toward a financial reckoning as the U.S. naval blockade cuts off its seaborne crude sales, Fox News reports. The sharpest effects may land on civilians, not the military Washington is trying to constrain.

The projection. Energy intelligence firm Kpler says Iran's trackable floating oil inventory outside the blockade zone has fallen to zero. It expects Tehran's crude revenue to dry up around mid-December, once payments already owed are settled. Buyers usually pay one to two months after delivery, which explains the lag. Fox says Iran held about 135 million barrels in floating storage before the war began in February, and that stockpile is now used up. U.S. Central Command estimates the blockade has already cost Tehran at least $25 billion in oil revenue.

Why it hurts. Gregory Brew of Eurasia Group and Miad Maleki of the Foundation for Defense of Democracies both put oil at roughly 30% of Iran's government budget. Maleki says the figure is 50% to 60% of regime revenue when indirect income is counted. Brew says Iran began the year expecting to export about 1.7 million barrels a day at roughly $54 a barrel, and actual exports fell short.

Not a collapse. Maleki calls the December date "more of a cash flow kind of disruption, and not really a collapse state." Tehran has so far let inflation and a weaker rial absorb pressure rather than stop salaries or allow widespread shortages. Brew expects non-military spending to be "slashed significantly" while military spending is "maintained and might even increase" because of the war footing. Fox notes the Treasury said last year that Iran sets aside about 200,000 barrels a day for its armed forces, a value above $10 billion a year, and that the Revolutionary Guard also earns from smuggling and sanctions-evasion networks.

What could change. Small amounts of oil can still move by truck, rail and across the Caspian Sea, so exports are unlikely to fall to nothing, Brew says. Both experts say a deal letting Iranian tankers leave the Persian Gulf could reverse the trend. Without one, Brew expects the squeeze to build into March, when Iran's new fiscal year begins, with "economic unrest, potentially even economic turmoil" as spending cuts roll out.

Note for readers: these are projections from Kpler and two outside analysts, not confirmed results, and the CENTCOM revenue figure is its own estimate. We relied on Fox's report and did not check Kpler's data.