Iran Has DAYS Until This Crisis Hits

The Islamic Republic is "scrambling" to find places to put the oil that President Donald Trump's blockade stops the regime from selling before suffering "irreversible" damage to the country's oil production.

“If the Iranians have to shut down oil and gas production due to a lack of storage capacity, there will be permanent damage to the productivity of the oil fields,” Marketwatch cofounder Derek Reisfield told the New York Post on Monday.

“The damage will be irreversible,” he said. “The loss in capacity could easily be half a million barrels in daily production.” That's a significant hit to a pre-war production rate of a little over three million barrels.

Oil wells can't just be flipped off and back on again like a switch, and that's a yuge problem. Once capped, a single oil well can require months — or longer — and millions of dollars to bring back into production. That's why the Islamic Republic last week brought an aging tanker out of retirement to use as a floating storage unit.

The Nasha, Tanker Tracker reported, is "a 30-year-old VLCC that's been anchored empty for the past few years; currently spending four days on a trip that should take 1.5-two days."

That was almost a week ago. Now things are worse. 

According to the Wall Street Journal on Monday, the regime "is resorting to previously unused methods to conserve storage space," including "using containers and 'junk storage' — disused tanks in poor condition—in the southern oil hubs of Ahvaz and Asaluyeh."

Tehran might be able to move some oil to China by rail, but not much. The rail links between the two countries simply aren't built for oil transportation. 

How long before the regime simply runs out of room and starts having to cap wells?

Estimates differ. 

Naval expert John Bulkeley estimated on Monday that in just "a few days the IRGC will have to start stopping the oil wells from pumping," while Zero Hedge today put the figure at "about 12 to 13 days." The American Enterprise Institute told The Post that "Tehran likely has until April 29 before its onshore storage facilities are filled." The Trump administration on Sunday gave the same estimate. 

That's Wednesday, for those keeping score at home.

I dunno. Maybe they could just let the oil just spill and create a nearly unprecedented ecological disaster for the next government to clean up. With the IRGC, anything is possible.

Open Source Intel quoted a recent Iran International report claiming that Iran’s Supreme National Security Council "reportedly warned that anti regime protests could resume within days as the economy deteriorates. Officials said economic pressure is the main trigger."

The same report estimated the regime can only withstand another six to eight weeks of the blockade, with up to two million private sector jobs disappearing along with energy extraction and exports. "Security officials reportedly concluded unrest is inevitable, with only the timing uncertain."

Or as Margaret Thatcher once famously advised President George H.W. Bush, "This is no time to go wobbly."

Granted, not everything here is running smoothly. Gas hit $4.24 here yesterday after dropping down below $3.50 just a week or so ago.

But there's a world of difference between having to pay more for gas for a little while and being a terrorist regime about to drown in its own oil.

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