Two from House of Saud, April 26:
Iran's Kharg Island storage reached capacity April 26 as the US blockade forces well shut-ins that could permanently destroy 300,000-500,000 bpd of production.
DHAHRAN — Iran’s Kharg Island oil terminal, which handles more than 90% of the country’s crude exports, reached effective storage capacity on Saturday, April 26, thirteen days after the US naval blockade of Iranian ports took effect. With 31 million barrels of onshore tank space now full and exports at near-zero, Tehran faces a choice it has spent two months trying to avoid: shut in wells that may never fully reopen.
US Treasury Secretary Scott Bessent framed the moment in advance. Storage at Kharg, he said, “will be full and the fragile Iranian oil wells will be shut in.” The arithmetic bore him out. At the blockade’s start on April 13, Kharg held roughly 18 million barrels against 31 million barrels of total capacity, according to Kpler data. Net inflow — production minus the trickle still leaving through Jask and floating transfers — was running at 1.0 to 1.1 million barrels per day. Thirteen days of accumulation consumed the remaining 13 million barrels of headroom.
The storage crisis is not the endgame. It is the trigger for a different and more permanent kind of damage: the destruction of reservoir capacity in Iran’s aging, water-injection-dependent oil fields. The Foundation for Defense of Democracies estimates that forced shut-ins will permanently eliminate 300,000 to 500,000 barrels per day of Iranian production capacity — worth $9 billion to $15 billion in annual revenue, gone not for the duration of the war but for years afterward. For Saudi Arabia, which holds more than half of all OPEC+ spare capacity and is lobbying Washington to end the blockade, the implications for post-war market structure are as large as they are uncomfortable.
The Storage Math: Thirteen Days From Blockade to Capacity
Kharg Island sits 25 kilometers off Iran’s southwestern coast in the Persian Gulf. A 1984 CIA assessment called it “the most vital” node in Iran’s oil system. That description has not aged. In March 2026, the island accounted for 84% of Iranian crude loadings, according to Kpler, with the Goreh-Jask pipeline terminal on the Gulf of Oman handling just 4.4%.Before the blockade, Iran was producing approximately 3.68 million barrels per day and exporting 1.5 to 2.15 million bpd through Hormuz, according to Al-Monitor and Bloomberg. Domestic refining capacity absorbs roughly 2.6 million bpd. The gap between production and refining-plus-exports determined how fast Kharg filled.
When the US blockade took effect on April 13, exports through Hormuz dropped to near zero. Bloomberg reported on April 26 that traffic through the strait had become “virtually impossible for the first time in history.” With exports halted, net inflow into Kharg storage ran at 1.0 to 1.1 million bpd — the residual after subtracting refinery intake and the small volumes still trickling through Jask.
Metric Value Source Kharg total storage capacity 31 million barrels Kpler Inventory at blockade start (April 13) ~18 million barrels (58%) Kpler (last reported March 7; no subsequent fill between US strikes) Spare capacity at blockade start (April 13) ~13 million barrels Calculated Net daily inflow 1.0–1.1 million bpd Al-Monitor, Bloomberg Days to capacity from April 13 ~12–13 days Calculated Projected saturation date April 25–26 Calculated Muyu Xu, senior analyst at Kpler, assessed that Iran had approximately 20 days of onshore storage remaining at current inflow rates and that production reductions would be “gradual over the coming week, with higher likelihood of acceleration into May.” Arne Lohmann Rasmussen, chief analyst at Global Risk Management, said Iran “was expected to run out of storage capacity within approximately one month, but it may already be forced to shut in part of its oil production within a couple of weeks.”
The Nasha: A 30-Year-Old VLCC Buying 48 Hours
Iran’s most visible response to the storage crunch was the reactivation of the Nasha, a very large crude carrier built in 1996 and previously decommissioned. Maritime intelligence sources, including TankerTrackers.com, identified the vessel repositioning toward Kharg Island in mid-April as floating storage. Iranian state media did not acknowledge the deployment.The Nasha carries approximately 2 million barrels. At 1.0 to 1.1 million bpd of net inflow, that capacity buys roughly 48 hours. Multiple outlets reported the ship was moving so slowly that a voyage expected to take 36 hours stretched to four days — a detail consistent with a vessel that has been idle for years and is operating at minimal crew and mechanical capacity.
Floating storage elsewhere in Iran’s system is already at saturation. Kpler estimates 183 million barrels of Iranian crude sitting on tankers globally; Kenneth Katzman, formerly of the Congressional Research Service, put the figure at 160 to 170 million. Neither figure changes the Kharg arithmetic. The island’s tank farm is the bottleneck between wellhead and tanker, and that bottleneck is now full.
What Happens When You Shut In a Water-Flooded Field?
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Also at House of Saud, April 26:
Iran’s Wellhead Overflow Crisis Hits Its Deadline — and the Damage Is Now Permanent
TEHRAN — Iran’s onshore oil storage reached functional capacity on or around April 26, triggering the forced shut-in of wells across the country’s aging southwest oil fields — and initiating a process of irreversible underground reservoir damage that no ceasefire, whenever it comes, can undo. The crisis marks a turning point in the war’s economic logic: the IRGC command structure blocking a diplomatic resolution is now actively destroying the physical asset base that any post-war Iranian recovery depends on.
The distinction matters because it changes what Iran loses. Foregone export revenue — the $435 million per day the Foundation for Defense of Democracies estimates the US naval blockade costs Iran — is a recoverable loss, at least in theory. Tankers sitting at sea can eventually deliver their cargo. But wells forced into prolonged shut-in undergo geological processes that permanently reduce the volume of oil that can ever be extracted from the reservoir. Water pushes into oil-bearing rock. Paraffin clogs tubing. Sand settles into perforations. The field doesn’t recover its pre-shutdown output — not in months, not in years, not ever....
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