Iran Oil Exports Hit 6-Year Low as U.S. Naval Blockade Tightens

In a move reflecting the impact of the U.S. 'maximum pressure' campaign, Tehran has faced a sharp decline in its ability to export energy to global markets. Iran's oil exports fell to approximately 209,000 barrels per day in May, marking the lowest level in at least six years. According to reports, this slump is driven by a tightened U.S. naval blockade and reduced demand from Chinese independent refiners, which also saw floating inventories drop from 190 million barrels in late April to about 147 million barrels currently.

This decline comes at a sensitive time for the global energy market, as Chinese imports of Iranian crude fell to 1.1 million bpd, the lowest since 2022. In comparison with recent Chinese data, the Manufacturing PMI stood at 51.8 in June per market data, indicating cautious growth that may not suffice to offset the lack of demand for sanctioned barrels. Furthermore, weak refining margins in China are contributing to lower appetite for Iranian crude despite significant price discounts.

Looking ahead, traders are monitoring global oil price levels and the impact of missing Iranian supply on market balance, alongside South Korean inflation data which hit 3.1% in June per the economic calendar. Investors await Fed Chair Powell's speech and the U.S. ISM Manufacturing PMI for signals on global demand. Given these factors, focus remains on Tehran's ability to bypass increasing naval restrictions in the coming months.