J.P. Morgan: US Navy blockade will force Iran to reduce oil production.

JPMorgan Chase pointed out in a research report that if the US Navy successfully implements a physical blockade at sea, it will force Iran to reduce its oil production. Analysts, including Natasha Kaneva, wrote in a report released on April 21st, that such blockade measures will not only create restrictions in the financial sector, but also directly constrain the total volume of oil exports, significantly reducing Iran's ability to trade through alternative routes and forcing Iran to reduce production in the long term. Iran's onshore crude oil storage capacity is about 86 million barrels, with the current capacity utilization rate at 54%, leaving approximately 40 million barrels of available capacity, enough to support about 22 days of oil exports. In addition, there are still about four very large oil tankers belonging to Iran-related businesses anchored in the Strait of Hormuz, capable of loading about 8 million barrels of crude oil and can extend the export time by about 26 days. If the export channels are completely cut off, Iran will be forced to start reducing production after about 16 days; around the 30th day, the reduction rate will continue to increase, until crude oil exports are almost completely stopped, with a daily reduction of about 1.9 million barrels. Analysts added: This blockade may increase bargaining power for the US, but the premise is strict and long-term enforcement of the blockade measures, which are expected to be maintained for several months.