Iran’s oil exports halt as US naval blockade shuts down Kharg Island

Iran’s oil exports have ground to a complete stop at Kharg Island, the terminal responsible for roughly 95% of the country’s seaborne crude shipments. A reimposed US naval blockade has kept tanker loadings at zero since July 31, marking one of the longest operational interruptions at the facility since the US-Iran conflict escalated earlier this year.

Satellite imagery from Windward and shipping data tracked by Kpler and Energy Aspects confirm that all three deepwater loading berths at Kharg Island are empty, and maritime activity around the terminal has dropped to its lowest point in months.

A blockade with a track record

This isn’t the first time the US Navy has choked off Kharg Island. The initial blockade phase ran from April through June 2026. Iranian crude and condensate exports collapsed from nearly 2 million barrels per day to below 300,000 bpd by May, according to Kpler data.

At some points during that first phase, tracking services indicated Iranian crude exports had reached zero.

An interim agreement temporarily eased the pressure, allowing some exports to resume. That agreement fell apart in mid-July, and the blockade snapped back into place almost immediately.

Iranian forces have engaged directly with US Navy vessels attempting to enforce the blockade. International shipping lanes in the region have become increasingly difficult to navigate, with commercial vessels steering clear of potential flashpoints.

The storage clock is ticking

Industry analysts suggest that Iran is likely to begin curtailing crude production as onshore and floating storage capacity fills up. Once tanks are full, wells have to be shut in, a process that can damage reservoirs and reduce long-term production potential.

What this means for global oil markets

Removing nearly 2 million barrels per day of potential supply from the market forces a recalculation across the global oil trade. Asian buyers who had previously relied on discounted Iranian crude, often shipped through complex intermediary arrangements, are being forced to seek alternatives.

For energy traders, the blockade creates a dual uncertainty. The supply reduction itself pushes prices upward, but the potential for a diplomatic resolution introduces downside risk to any bullish positioning.

The first blockade phase lasted roughly two months before the interim agreement provided temporary relief. With that agreement now in pieces, market participants are pricing in the possibility that this second phase could persist longer, particularly given the military confrontations that have accompanied enforcement efforts.

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