In debates over oil, the main issue is not always what first appears. The usual question is how much oil Iran can sell under conditions of war, blockade, and disruption in maritime routes. But the more urgent question may be this: how much of the oil Iran continues to produce can it store?
This seemingly technical distinction is in fact political and decisive. If part of Iran’s oil had already left the danger zone before the blockade intensified and is now offshore, along routes near the Strait of Malacca, Malaysia, or Singapore, then oil exports may not be completely locked down in the short term. For a few weeks, or even a month or two, there may still be some possibilities for sale, transfer, or trade. But the real crisis is not necessarily where markets and media are looking. The main knot may form in the chain of production, storage, the entry of empty tankers, port capacity, insurance, payment, and the return of foreign currency revenues.
An oil well is not a water tap that can be turned off and then turned back on whenever desired. Oil production is a technical, costly, and time-consuming process. If wells are shut down, bringing them back into production is not simple and can damage part of the country’s production capacity. Production must therefore continue. But when production continues, the oil must be stored somewhere.
