Despite the severe disruption of maritime traffic in the Middle East, Iran continues to transport millions of barrels of crude oil through the Strait of Hormuz.
While the ongoing conflict has paralysed the exports of neighbouring Persian Gulf nations, Tehran has successfully shipped between 12 million and 13.7 million barrels since hostilities commenced on 28 February, according to a CNN report.
Current data suggests Iran is managing exports of approximately 1 million barrels per day (bpd), compared to its 2023 average of 1.69 million bpd.
US avoids energy infrastructure targets
The United States has so far refrained from targeting Iranian oil infrastructure, including refineries, pipelines, and storage facilities, even after destroying a significant portion of the Iranian navy.
Although Israeli strikes have damaged storage tanks near the capital, Tehran, recent US strikes on Kharg Island – located 30 kilometres off the coast – were strictly limited to military targets,.
Kharg Island remains Iran’s primary export hub, and satellite imagery confirms that all 55 crude oil storage tanks on the island remain operational.
However, the US Ambassador to the United Nations, Mike Waltz, has indicated that President Donald Trump may reconsider this stance if Iran continues to obstruct shipping in the strait, noting that the administration intends to maintain “optionality” regarding energy infrastructure.
US Treasury Secretary Scott Bessent added that Washington is currently “fine” with certain Iranian, Indian, and Chinese vessels transiting the waterway.
Strategic exports and ‘dark’ tankers
To circumvent Western sanctions and mitigate the risk of strikes, Iranian vessels frequently deactivate their transponders to mask their locations. Recently, six very large crude carriers (VLCCs) were observed operating near Kharg Island with their transponders off or broadcasting deceptive data.
Iran also appeared to anticipate the conflict by “turbo-charging” its exports in February, reaching a daily average of 2.04 million barrels—a 25 per cent increase over the previous year’s figures.
Tehran is also leveraging its control of the strait as a diplomatic tool. Foreign Minister Abbas Araghchi stated that the waterway remains open to all except “enemies” and those attacking Iran.
This strategy was recently evident when India secured the passage of two vessels after releasing three seized Iranian tankers.
Economic shifts and vulnerabilities
In a potential shift for global energy markets, a senior Iranian official told CNN that Tehran is considering allowing passage for tankers that trade oil in Chinese yuan rather than the US dollar.
While China has long sought to facilitate yuan-based oil trades, success has previously been limited.
Despite its current leverage, analysts note that Iran remains highly vulnerable to any total closure of the strait.
Unlike Saudi Arabia or the United Arab Emirates, which possess alternative port facilities in the Red Sea and the Gulf of Oman, Iran has very limited overland routes and remains almost entirely dependent on the Persian Gulf for its oil exports.
