Iran has been severely hit by the war targeted against it jointly by the United States (US) and Israel leading to huge damages. But on the other hand, its move to block the Strait of Hormuz has resulted into generating cash from the sale of oil amid rising prices. Tehran is estimated to have generated roughly $139 million per day from sales of this key blend so far in March, up from about $115 million per day in February, Bloomberg reported citing export estimates from TankerTrackers.com.
Iran’s crude exports are estimated to have stayed broadly in line with prewar levels of around 1.6 million barrels per day this month, the report said.
According to estimates, Iran’s crude has strengthened relative to the global Brent benchmark. Its discount has narrowed to about $2.10 per barrel at the start of this week, the tightest level in nearly a year. Before the conflict, the gap had exceeded $10 per barrel.
Iran’s oil production has remained unaffected by the US strikes as the attacks were on only military sites while oil facilities at Iran’s key export hub on Kharg Island have remained untouched. Iran has warned US and Israel that Hormuz would be “completely shut” if its energy infrastructure is targeted.
Kharg Island: Iran’s Oil Hub
The island reportedly handles around 90 per cent of Iran’s crude oil exports. If the United States manages to take over, it would economically cripple Iran. The island is a five-mile stretch of land and is described by US officials as the “nexus for all the Iranian oil supply,” reported CNN.
Kharg Island has a storage capability of around 30 million barrels. Around 8 million barrels of crude are currently stored in the island at present.
On March 13, Donald Trump had announced through a social media post that the US had ‘obliterated’ military targets on Iran’s Kharg Island, warning that oil infrastructure there could be next. However, he claimed that the US hit only military sites on the island and not the oil infrastructure.
“For reasons of decency, I have chosen NOT to wipe out the oil infrastructure on the Island. However, should Iran, or anyone else, do anything to interfere with the Free and Safe Passage of Ships through the Strait of Hormuz, I will immediately reconsider this decision,” Trump had said.
Iran’s Parliament Speaker Mohammad Bagher Ghalibaf warned the US against attacking the island. “All enemy movements are under the full surveillance of our armed forces. If they step out of line, all the vital infrastructure of that regional country will, without restriction, become the target of relentless attacks.”
