Photo: Getty Images
The economic clock is ticking for Iran as Middle East oil exports returned to pre-war levels in September, showing the regime's attacks in the Strait of Hormuz are no longer working to pressure its neighbors and the United States.
At least 16.5 million barrels a day of crude oil left the Middle East Gulf region between Sept. 1 and Sept. 28, matching the pre-war average for the region's producers other than Iran, according to tanker-tracking and satellite analysis published this week by global trade data firm Kpler. That is 10.5 million barrels a day more than the region averaged in March, the first full month after the war shut down the strait, the firm found.
The one producer missing from the recovery is Iran itself.
Tehran's central wartime bet seems to be a losing proposition
While its neighbors have seen the revival of their oil exports, Iran is missing out on the recovery. Iran's oil exports have hovered near zero since the U.S. imposed a naval blockade of Iranian ports in July after the ceasefire broke down. Counting Iran, the region's crude exports stand at 91% of pre-war levels.
The numbers undercut Tehran's central wartime bet: that choking off the world's most important energy corridor—the Strait of Hormuz—would inflict enough pain on global markets to force Washington and the Gulf states to deal on Iran's terms. Things have not worked out that way, so far.
Instead, the region's producers spent seven months rebuilding their export system around the strait, while Iran's own access remained cut off. Before the war began Feb. 28, 83% of the region's crude passed through Hormuz. In September, 40% left the region without crossing the strait at all, Kpler found, flowing west through Saudi Arabia's East-West Pipeline to the Red Sea port of Yanbu and east through the United Arab Emirates' Abu Dhabi Crude Oil Pipeline to Fujairah on the Gulf of Oman.
At the start of the conflict, Iran relied on its illicit oil exports for a stream of revenue. But, that pathway was severed when the United States first imposed a blockade in April. The June 17 memorandum of understanding between Washington and Tehran, paired with a temporary U.S. oil waiver, briefly restored Iranian flows to 1.1 million barrels a day. Then the waiver was revoked, and the blockade reimposed in July.
"They will have nothing to trade for anything": Bessent
U.S. Treasury Secretary Scott Bessent says that Iran is still relying on the revenues from the oil it exported during that ceasefire, but time is quickly running out for the regime.
Bessent said Sunday that only about 15 million barrels of Iranian oil remain out for delivery, nearly all of it bound for China.
"They will have nothing to trade for anything, probably within the next two weeks," Bessent said on Fox News' "Sunday Morning Futures."
President Trump said that economic pain is what pushed Iran’s leaders to call last week for a new ceasefire deal to open the Strait of Hormuz in a series of indirect talks on the sidelines of the United Nations General Assembly. President Trump rejected Iran’s offer.
“I rejected their deal. They want to make a deal where they open the strait immediately because they’re losing so badly,” Trump told reporters last weekend. Yesterday, Trump told an assembly of reporters on the White House lawn that Iran will "either sign a very fair deal, or they won’t exist any longer.”
“What they wanted is to immediately open the Hormuz Strait. You know why? Because they’re dying. You know why they’re dying? Because they have no money coming in because they get their money from the Hormuz Strait,” he continued. “They outsmarted themselves. They said, ‘Let’s close it and cause a problem for the world.’ And I came along, and we put up the greatest blockade ever in military history.”
Operation Economic Outcast
A U.S. pressure campaign has also halted the operation of Iran-linked oil tankers. Dozens of Iranian or Iranian-linked vessels that hauled sanctioned crude to China have been stuck near Sri Lanka and Malaysia since July, unable to return home through the blockade, and U.S. officials have pressed governments there to keep local vessels from resupplying them, The Wall Street Journal reported Wednesday.
The squeeze on Iran's oil trade is the centerpiece of what the administration calls Operation Economic Outcast, which Bessent announced Aug. 24 with a pledge to sever the regime’s economic lifelines, Just the News previously reported. Treasury has since issued determinations targeting five sectors of Iran's economy, including shipping, gold and digital assets, sanctioned nearly 60 entities, individuals and vessels, and cut off the correspondent banking access of Banque Misr UAE, which it said processed about $1.8 billion for Iran's shadow banking network.
The campaign followed President Donald Trump's August vow to punish any country that offers Tehran a financial lifeline, and the UAE's decision days earlier to suspend all trade and financial transactions with Iran after the regime allegedly fired a missile at the Emirates, Just the News previously reported.
Victoria Coates, a vice president at the Heritage Foundation, told Just the News at the time that the April blockade flipped the strategic logic of the strait. "We're going to hold the Strait of Hormuz hostage," she said of the administration's approach.
Reprinted with permission from Just The News.
The opinions expressed by columnists are their own and do not necessarily represent the views of AMAC or AMAC Action.
Comments