Iran Eyes $130 Oil While at Least 50 Tankers Sit Stuck in the Gulf

An oil price of $130 per barrel could be one of the scenarios of Iran’s economic planners preparing the budget for the next Iranian year starting March 2027, according to Iranian media. 

It is not clear yet what baseline Iranian economists will use in next year’s budget, but the Plan and Budget Organization may include a scenario assuming $130 a barrel oil, according to Fars News Agency, which is close to the Islamic Revolutionary Guard Corps (IRGC). 

It is highly unlikely the baseline would be as high as the $130 oil floated in Iranian media in recent days. Iran has typically budgeted at very conservative oil price assumptions. 

Regardless of where oil prices will be next year, Iran may not benefit from oil price increases at all, due to the U.S. blockade crippling Iranian oil exports. 

As of early October, the U.S. blockade in the Gulf of Oman had already stranded at least 50 Iranian tankers laden with oil inside the Persian Gulf near Iran’s coastline, U.S.-based non-profit and non-partisan policy organization United Against Nuclear Iran (UANI) said in a shipping update.

After the collapse of the U.S.-Iran ‘deal to make a deal’, the U.S. Navy reinstated in mid-July the blockade in the Gulf of Oman outside the Strait of Hormuz to force Iran’s oil exports to zero and gain leverage in negotiations.

Publicly, Iran remains defiant and claims it will find ways to dodge the U.S. blockade. 

But vessel-tracking services have estimated that Iran’s oil exports have plunged since August. 

Iranian oil in floating storage has also been drained amid the U.S. Navy blockade. 

“There’s no more oil to discharge to China anymore,” Kpler’s head of crude oil analysis, Homayoun Falakshahi, said, as quoted by the Wall Street Journal earlier this month. 

Before the United States imposed a blockade on Iranian ports in April, Iran had close to 150 million barrels in floating storage. By mid-October, oil in floating storage had shrunk to just 866,000 barrels, according to Kpler’s data.  

This post appeared first on https://oilprice.com