Iran Tanker Loadings Continue Amid US Blockade; Oil Prices Dip on Talk Hopes

Iran continues to load millions of barrels of oil onto supertankers despite an ongoing U.S. naval blockade, according to satellite imagery analyzed by Bloomberg. A European Union satellite image from Monday, April 20, showed a very large crude carrier (VLCC) moored at Kharg Island, with 13 ships, mostly VLCCs, anchored nearby. An image from the day before the blockade began on April 13 showed about half that number, Rigzone reported.

The U.S. blockade in the Sea of Oman has stopped almost three dozen Iranian vessels and intercepted at least two supertankers this week, forcing them to turn back to Iranian ports. U.S. forces also boarded the sanctioned tanker Majestic X in the Indian Ocean. Analysts note these actions are extending the blockade far beyond the Gulf of Oman. Iran has been the only major oil exporter out of the Persian Gulf since the war began in late February, after Tehran effectively closed the Strait of Hormuz to other traffic.

Market watchers are assessing how long Iran can maintain production. Analysts at FGE NexantECA said in a note that Iran has 90 million barrels of available storage and could maintain current production levels of about 3.5 million barrels a day for another two months, even if exports are completely halted. JPMorgan Chase & Co. analysts wrote that the blockade would eventually force Iran to curtail production, "leaving far less room for workaround trade."

Oil prices fell Friday on renewed hopes for U.S.-Iran peace talks. West Texas Intermediate futures fell 1.5% to settle above $94 a barrel after the White House said it was sending envoys to Pakistan with the intention of talking with Iranian officials. Despite the daily drop, WTI futures were still up 13% for the week, Rigzone reported. Analysts at Goldman Sachs Group Inc. said in an April 23 note that crude oil production in the Persian Gulf will take "a few months" to mostly restore, assuming a full reopening of Hormuz, with output curtailed by about 14.5 million barrels a day in April.

In a related move to counter supply disruptions, the Trump administration has extended a key shipping waiver. The Jones Act waiver, which allows foreign-flagged vessels to move commodities like crude oil, refined products, and natural gas liquids between U.S. ports, has been extended by 90 days through mid-August. The waiver was set to expire May 17. A White House spokeswoman said the extension "provides both certainty and stability" and will help ensure vital energy products are maintained, according to Rigzone.

The Strait of Hormuz closure has pulled an estimated 13 million barrels of crude and refined products from the world market daily. The Jones Act waiver extension is expected to immediately help U.S. refiners seeking waterborne shipments of crude and booking cargoes for summer delivery, providing logistical flexibility for domestic energy transport amid the ongoing global disruptions.