Iran oil blockages risk military escalation

Significance

US-imposed sanctions have slashed oil exports, which are now nearly all to China. Output remains robust but is running up against the limits of national storage.

Impacts

• Oil exports will be volatile and hard to track, as Iran seeks new means of evading sanctions.
• Oil production may have to be cut further within a few months due to the filling of storage.
• In the case of an agreement with Washington, bounceback of production and exports could be swift.