Analysts said that Iran could withstand a total halt of oil exports for up to two months before it is forced to cut?production. This comes after the U.S. began blocking shipments into and out of its ports on April 13th. The blockade may prevent approximately 2 million barrels of Iranian crude per day from reaching China, its primary buyer. The blockade could prevent 2 million barrels per day (bpd) of Iranian crude from reaching its main buyer China.

Iran will have to divert crude oil into tanks on its land to store it. Once the tanks are filled, Iran would have to reduce its upstream production.

FGE NextantECA, a consultancy, estimates that Iran has a crude storage capacity of about 90 million barrels onshore out of 122 million barrels total.

FGE NextantECA stated in a?note that Iran can maintain its current production of 3.5 million bpd for two months without any exports. This could be extended to three months by a modest reduction of 500,000 bpd.

They added that Iranian refineries process around 2 million barrels of oil per day.

The Iranian authorities concerned were not available to comment immediately.

Energy Aspects estimates that the available onshore storage is significantly lower, at 30 million barrels based on Kayrros data.

According to this scenario, Iran can maintain its current export levels until 16 days after the storage capacity is exhausted, based upon export levels of 1,8?million bpd.

Richard Bronze, cofounder of Energy Aspects, said that the blockade might not have an impact on Iranian production until April. However, if it continued into May, then the output would need to drop significantly.

He said that the consultancy assumes Iran can't use its "full nameplate capacity" and added that historical data shows stocks peaked at around 92 million barrels by May 2020. This is likely a realistic limit.

Bronze said that Iran would?likely use available oil tankers as floating storage in ports, delaying the production cuts. The 'U.S. The?U.S. military reported that more vessels are being turned back due to the blockade. This includes the Chinese-owned Rich Starry tanker, which is subject to U.S. sanctions and was seen returning through the Strait of Hormuz Wednesday.

The Wall Street Journal reported that eight?oil tanks linked to Iran have been intercepted ever since the blockade started on Monday. An official from the United States said that a U.S. destroyer intercepted two oil tankers on Tuesday as they attempted to leave Iran's Chabahar Port on the Gulf of Oman. (Reporting by Ahmad Ghaddar Editing by Alexandra Hudson)

(source: Reuters)