As the United States-imposed naval blockade on Iranian oil exports continues in the Strait of Hormuz, Tehran is making strenuous efforts to manage the surplus crude oil with a plan to activate a temporary floating storage.

According to a report by Gulf News, maritime analysts indicate that despite the export disruptions caused by sanctions, the flow of crude oil to Kharg Island continues unabated at a rate of 1 to 1.1 million barrels per day. The onshore storage facilities currently retain an additional capacity of approximately 13 million barrels.

At this rate, the remaining capacity could be completely exhausted within just two weeks, at which point the terminal would reach its maximum storage limit.

Iran to utilise 'Floating Storage' at Sea

To alleviate this mounting pressure, Iran has adopted a strategy of 'floating storage', accumulating surplus oil using tankers moored at sea.

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Iran is planning to use the 30-year-old M/T Nasha storage tanker. Built in 1996, the vessel measures over 330 meters in length. Prior to being brought back into active service, it had remained largely idle for several years.

Kharg Island: The Backbone of Iran's Oil Economy

Kharg Island serves as the backbone of Iran's oil economy, handling approximately 90 per cent of the country's crude oil exports. In the deep waters surrounding this island situated in the Persian Gulf, massive supertankers can easily anchor to load oil cargo that is primarily destined for Asian markets.

Crude oil flowing from major offshore fields, such as Abuzar, Forouzan, and Doroud, is processed here. Any disruption or congestion at Kharg quickly escalates into a national economic challenge.

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Floating Storage: A Temporary Solution

It is worth noting that floating storage serves merely as a temporary solution. It is both limited in capacity and expensive; moreover, it cannot serve as a substitute for large-scale onshore infrastructure. Should storage capacity on Kharg Island reach full saturation, Iran may be compelled to shut down its oil wells. Such measures could inflict long-term damage upon the reservoirs and potentially diminish future production capacity.