U.S. Blockade Traps Millions of Barrels of Iranian Oil

The United States government renewed a blockade of Iranian ports in mid-July, severely restricting the flow of crude oil to independent refiners in China. Data from Kpler shows that 41 million barrels of oil and 22 empty tankers are currently trapped within the Persian Gulf, while only 10% of the 40 million barrels staged near Singapore remains unsold.

This supply squeeze caused the price of Iranian Light grade oil to shift rapidly, moving from a $3.50 discount to a $3.50 premium over ICE Brent within a single week. The blockade aims to choke off revenue to Tehran and has created a significant bottleneck in the global oil trade.

Treasury Secretary Scott Bessent announced plans to implement the "greatest coordinated economic isolation in the history of the world" against Iran. Bessent indicated that the U.S. may target Chinese ports or refiners that continue to purchase Iranian oil, a move that could escalate diplomatic and economic tensions between Washington and Beijing.