WASHINGTON — The U.S. military blockade of Iran’s ports will eventually deprive Tehran of crucial oil revenue, but the regime could likely withstand the pressure for months without a major economic crisis or lasting damage to its oil fields, energy industry analysts and two Western officials familiar with intelligence assessments told NBC News.
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After the blockade was imposed about a month ago, President Donald Trump and top officials in his administration suggested it would produce an immediate crisis for Iran’s oil sector.
Trump said last month that Iran’s oil infrastructure could “explode” possibly within three days because the blockade meant Tehran could not export the oil it’s pumping from wells. “If they don’t get their oil moving, their whole oil infrastructure is going to explode,” Trump told reporters.
That scenario did not materialize. But the naval blockade has prevented dozens of Iranian tankers off the coast from moving through the Strait of Hormuz.
Administration officials say the blockade is designed to cut off Iran’s oil exports — the country’s economic lifeline — and force Tehran to reopen the Strait of Hormuz and bow to U.S. demands at the negotiating table.
Iran has gradually begun to cut back oil production due to the blockade and, at some point within the next two months, it may run out of storage capacity for its oil and even be forced to shut down some wells. But most analysts say Iran can probably avoid shutting down wells since a significant amount of its oil can be consumed domestically, allowing most oil fields to keep operating.
“They’re going to have to shut down about half of their production. They can keep producing because they can refine it domestically,” said Robin Mills, a fellow at Columbia University’s Center on Global Energy Policy and the CEO of Qamar Energy, an energy consulting firm.
Iran has experience when it comes to cutting back oil production, said Gregory Brew of the Eurasia Group think tank. In the past 15 years, Iran had to slash its oil production twice due to U.S. sanctions.
“I don’t think it’s going to do tremendous damage to their infrastructure,” Brew said. “They know how to do this. They’ve done it before.”
Iran has adapted to the blockade by scaling back oil production, reducing the amount of oil loaded onto tankers from about 11 million barrels per week to roughly 6 to 8 million barrels a week, according to Brew.
Iran also already sold large amounts of oil before the blockade at high prices and still has about 30 million barrels of oil at sea in Asia, which it can sell, giving it “a bit of a cushion to fall back on,” Brew said.
Still, if the blockade remains in place, the economic consequences will grow by depriving the regime of oil revenue, causing a shortfall in the government budget, aggravating inflation and driving up the cost of imported goods that must now be delivered over land.
It’s unclear if that economic pain, which could play out over several months, would be sufficient to push the regime into making significant concessions to the United States. And it’s also unclear whether Trump is willing to wait that long for a possible tipping point in Tehran as the effects of Iran’s closure of the Strait of Hormuz mount for the U.S. and the global economy.
In a phone interview with NBC News on Friday, Trump said of the critical waterway: “We really control it; they don’t. And we’ve taken the business away from them.”
There are “no boats going into Iran,” he added. “They’re dying.”
The regime in the past has shown it can absorb severe economic pressure as long as its grip on power is not threatened, Western officials and experts said.
“Presumably, they could carry on like this for months based on what they’ve done in the past,” Brew said.
Iran’s leadership will eventually have to confront a devastated economy and frustrated population. But for the moment, the regime — now dominated more than ever by hard-line elements of the Islamic Revolutionary Guard Corps — is firmly entrenched, the Western officials said.
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