U.S. Blockade Squeezes Iran's Crude Oil Supply to China, Potential Cutoff by Late September
Nashnova编辑部
The US blockade of Iranian ports has nearly emptied the 40 million-barrel floating stockpile near Singapore, with Kpler warning that almost no new Iranian crude will be available for delivery after late September — leaving China's independent refiners facing a supply cliff and possible output cuts.
How much Iranian oil is left at sea near Singapore?
Waters near Singapore serve as the main ship-to-ship transfer point for Iranian crude headed to China — large tankers offload onto smaller vessels that then sail into Chinese ports.
Roughly 40 million barrels of Iranian crude sit in that zone, but only about 10% — the cargo of two supertankers — remains unsold.
This means → the floating buffer is nearly gone. Kpler senior crude analyst Muyu Xu warns: "After late September, there is almost no new Iranian crude available for delivery."
Why did the price swing reverse by $7 in a single week?
Iranian light crude is now quoted at a $3.50-per-barrel premium to ICE Brent. Just one week ago, the same grade sold at a discount of roughly $3.50.
In plain terms = the same oil flipped from "bargain bin" to "seller sets the price" — a $7-plus reversal in seven days.
This reflects an extreme scarcity of available cargoes; Iran now has pricing power, a clear sign the market has tilted to sellers.
How much oil is trapped inside the Persian Gulf?
Since the US restarted its blockade in mid-July, at least 41 million barrels of Iranian crude have been stranded on vessels inside the Gulf, and 22 empty tankers are also unable to leave port.
This means → Iran cannot export new oil *or* redeploy empty ships — the export channel is choked at the source.
The damage is twofold: Iran's fiscal revenue takes a direct hit, while China's independent refiners — known as "teapot" refineries — lose their primary feedstock simultaneously.
Why are teapot refineries the first to feel the squeeze?
Teapot refineries are the main buyers of Iranian crude, relying on its price discount to sustain margins.
Earlier, floating Iranian stocks near Singapore had been building because Chinese demand was soft. Recent bulk purchases by teapots drew down those stocks — but also drained the remaining buffer faster.
Put simply = the oil was piling up because nobody was buying; now that buying resumed, the stockpile is vanishing — a demand recovery colliding with a tightening blockade, the worst possible timing.
Could sanctions escalate further?
US Treasury Secretary Scott Bessent has publicly pledged "the largest coordinated economic isolation campaign in history" against Iran, though specifics remain unpublished.
The scenario markets fear most: Washington designating Chinese ports or refineries that receive Iranian crude as sanctions targets — a move that would directly escalate US-China tensions.
Whether teapot refineries can secure enough alternative supply before October, or are forced to cut throughput, will be the key test of this blockade's real-world impact.
Content is for reference only, not financial advice.