As the U.S. counter-blockade remains in place without any sign of a breakthrough, there are clear indications that Iran is going to suffer beyond losing its vital revenue from the sale of oil. In fact, it is much more damaging than the loss of petrodollar in the long run.
It is the damage to the infrastructure that could happen in a sequence that analysts are worried about. The damage is going to be triggered off by the storage saturation, well-shut-ins and of course, physical degradation.
As of April 2026, Iran's steady production oil has been dealt a severe blow by a 'hard ceiling' of storage capacity, because, if Iran cannot load its oil into tankers for shipment, reality kicks in; Iran has a finite amount of space, both onshore and offshore - the floating storage.
According to Societe Generale and Energy Aspects, Iran's onshore tanks can only absorb excess production for around two weeks, not more. As for floating storage, Iran has about 176 million barrels of oil stored in tankers in international waters outside the Gulf. These floating tankers, however, been tracked down and trapped by the U.S.Navy in such a way that Iran cannot bring in new supply to them as long as the blockade remains so.
In these circumstances, Iranian authorities have very little choice other than halting the activities of pumping oil out. Closing an oil well is not akin to closing a tap.
For instance, Iranian oil infrastructure suffered years of less-than-perfect maintenance due to Western sanctions. The aging pumps and pipes often need gas injections to maintain pressure. In this context, a sudden closure can cause permanent structural damage.
If a well is shut, on the other hand, it can take weeks, if not months for it to be revived. Some analysts fear if there is a water seepage, it can block the flow of oil.
Even if the U.S. blockade is removed without a significant agreement, the United States may maintain the heavy sanctions against Iran. For instance, Iranian national oil company, NIOC, may not be able to buy specialized parts in open market. The company then has to turn to backchannels or smuggling to address the critical issue.
Analysts fear even if the blockade is removed, it will take 3 to 6 months for a recovery; Iran could still potentially - and permanently - lost 10 to 15% of its storage capacity.
At political level, Iran appears to be making serious efforts to get the blockade lifted in order to avoid a disastrous impact on its fragile oil infrasture. Whether their latest proposals are good enough to please the Trump administration remains to be seen, though.
