Kamal Ghorui
Oil has been seen oozing into the sea near Kharg Island in the Strait of Hormuz, raising fresh concerns over the stability of Iran’s most critical energy export hub.Satellite images released on Friday showed oil spreading across the water between May 6 and May 8, covering an estimated 20 square miles of sea surface. Monitoring group Orbital EOS told The New York Times that the spill could amount to as much as 3,000 barrels of crude lost, New York Post reported.Iran produces millions of barrels of crude oil every day, much of which flows through Kharg Island, the country’s main export terminal.
The cause of the leak remains unclear. While US strikes have previously targeted infrastructure near Kharg Island during the wider conflict, the most recent known attacks took place in early April, weeks before the spill was detected.Energy expert Dalga Khatinoglu told The New York Times: “Large volumes of crude stored in tankers are increasing spill risks. A possible rupture in the old undersea pipeline to Abuzar field is another source.”Kharg Island handles roughly 90 percent of Iran’s crude exports, making it the backbone of the country’s oil economy, with major shipments going to China and other Asian buyers.
US naval blockade squeezes Iran’s export lifeline
The spill comes as the United States intensifies a naval blockade of Iranian shipping routes through the Strait of Hormuz and Gulf of Oman, aimed at cutting Tehran’s oil revenues and restricting its regional leverage.According to Pentagon-linked assessments cited in reports, Iran has already lost billions of dollars in export revenue since the blockade began on April 13. US officials say that the operation is designed to enforce ‘freedom of navigation’ while applying sustained economic pressure on Tehran.
.
US Treasury Secretary Scott Bessent said Washington had ‘complete control’ of the Strait and that the pressure campaign would continue until maritime conditions normalize.The Strait of Hormuz remains one of the world’s most critical energy chokepoints, carrying nearly 20 percent of global oil flows. The blockade has sharply reduced vessel traffic, with insurers and shipping companies increasingly avoiding the route.Iran has rejected the US operation as illegal, calling the seizure and redirection of tankers ‘piracy’ and responding by tightening control over parts of the waterway and restricting foreign shipping movements.
How the blockade is forcing a storage crisis in Iran
A key consequence of the blockade is mounting pressure on Iran’s oil storage system. With exports disrupted, crude is piling up at production sites and export terminals.Recent analysis by Kpler suggests Iran could run out of crude storage capacity within 12 to 22 days if the blockade continues. US Treasury Secretary Scott Bessent has also claimed that Kharg Island storage could reach full capacity ‘in a matter of days’, Al-Jazeera reported.This creates a critical bottleneck: Iran is still producing large volumes of oil, but cannot move it out at the same pace.As a result, oil is being diverted into storage tanks, floating tankers and offshore holding systems, rapidly filling available capacity.
Kharg Island nearing capacity limits
Satellite data and energy consultancy estimates indicate that storage levels at Kharg Island have risen sharply since the blockade began. At times, storage has approached levels considered operationally risky.Generally, oil facilities avoid exceeding about 80 percent capacity due to safety and operational constraints. However, Iran has been forced to push beyond normal limits as exports slow.To manage the overflow, Iran has reactivated ageing floating storage units, including the M/T Nasha, a 30-year-old very large crude carrier (VLCC) previously out of service, now used to hold excess crude offshore.Maritime analysts say this highlights growing strain on Iran’s oil infrastructure. While Iran continues producing more than 1 million barrels per day, the gap between output and export capacity is widening.Experts warn that if storage fills completely, Iran may be forced to cut production temporarily to avoid shutting down wells.
US strategy: Tightening pressure on oil revenues
The US blockade forms part of a broader strategy to reduce Iran’s oil income, which Washington says funds regional military activity. Officials argue the maritime restrictions are intended to enforce ‘freedom of navigation’ while weakening Tehran’s financial base.The pressure campaign has already disrupted shipments and increased volatility in global energy markets. With fewer vessels able to move through the Strait of Hormuz, oil supply chains are increasingly strained.US officials say that the economic impact on Iran has been significant, though Tehran has continued limited exports using stored crude and previously loaded tankers at sea.
Iran’s response: Storage, floating oil and limited exports
Iran has responded by relying heavily on alternative storage systems and previously exported crude still held on tankers worldwide. Analysts estimate that tens of millions of barrels remain ‘afloat’ and can sustain some revenue flow in the short term.Tehran has also imposed restrictions on foreign shipping in the Strait of Hormuz, describing US actions as economic coercion. Iranian officials argue that if its oil exports are blocked, global shipping cannot operate freely through the waterway.Despite the pressure, Iran continues to export limited volumes where possible, though at reduced levels compared to pre-blockade flows.
What happens next?
Analysts observe that Iran is now entering a critical phase where storage limits could dictate production decisions more than market demand.If the blockade continues, Iran may be forced into one of two options:
- Cut oil production, risking long-term damage to oil reservoirs and future output, or
- Expand floating storage further, increasing costs and operational risks.
(with inputs from agencies)
