Iran’s ability to disrupt Middle Eastern oil exports is pretty firmly established at this point — but that leverage is weakening as Gulf producers begin to restore shipments through the Strait of Hormuz and restore routes that bypass it.
But that recovery is not guaranteed to last, and Washington has not yet defeated Tehran or eliminated its ability to escalate.
Iran’s Drones That Russia Is Using. Image Credit: Creative Commons.
Iran F-14 Tomcat Fighter. Image Credit: Creative Commons.
Seven months after the U.S. and Israel launched strikes in February, Iran now faces several problems: neighboring producers are finding new ways to sell their oil, and the U.S. blockade is restricting its own exports.
That means, as Iran’s economy struggles more by the day, the oil routes it needs to attack are diversifying.
A Military Badly Damaged
Iran can respond to U.S. pressure in a handful of ways.
It can disrupt traffic through the Strait of Hormuz either by striking ships or by threatening to do so, or it can rely on its allies and proxy groups to cause disruption elsewhere.
Militarily, Iran’s main strength is its missiles.
The regime’s military capabilities were badly damaged during U.S. and Israeli strikes, with its warships, air defenses, airfields, and even some of its missile infrastructure having been severely degraded.
In May testimony to Congress, U.S. Central Command chief Adm. Brad Cooper said American forces had destroyed 161 Iranian naval vessels and disabled 82% of Iran’s air-defense systems.
He said Iran’s air force, previously capable of flying up to 100 sorties daily, was no longer conducting missions.
Israel also reported significant damage.
On March 7, the Israeli military said it struck 16 aircraft belonging to the Revolutionary Guard’s Quds Force at Tehran’s Mehrabad Airport.
Israel said that those aircraft had been used to transport weapons to Hezbollah, the Lebanese armed group that is allied with Iran.
Militarily, Iran can respond — but largely only in the form of missile strikes.
Missiles Are Iran’s Strength
Iran does not need a completely intact conventional fleet to make the war costly for the United States.
Before the fighting began, Iran’s ballistic missile stockpile was estimated at between 2,500 and 6,000 projectiles.
Iran’s missile and drone stockpile allowed it to threaten Israel and American bases, and today, they are being used to target Gulf infrastructure – and those strikes are causing damage.
For years, that arsenal served as a deterrent – but now, in the middle of war, the regime is proving that it is willing to deploy those weapons.
On July 17, Kuwaiti authorities said that an Iranian attack had hit a power-generation and water-desalination plant. The strike caused a fire and physical damage.
On August 1, Kuwait’s Defense Ministry also said that Iranian drones had targeted a government facility in the north of the country, as well as civilian equipment on Boubyan Island.
Air defenses intercepted the drones, but the falling debris caused property damage, according to the ministry.
More Oil Crosses Hormuz: Iran’s Leverage Slips Away
But Iran’s leverage is diminishing, starting with the traffic moving through Hormuz.
More oil is moving through the waterway despite ongoing Iranian threats and strikes.
Reuters reported September 27 that Kpler expected September crude exports through the strait to reach 9.719 million barrels per day. Saudi shipments from Ras Tanura were projected to reach 3.25 million barrels per day, up from 929,000 in August.
Operators have also been using a U.S.-supervised route closer to the Omani coast — and while that route has not proven invulnerable to strikes, it is largely working.
Washington and Gulf producers are restoring substantial exports without accepting Tehran’s demands, all while Tehran suffers increasing economic fallout from sanctions and the blockade.
The clock is ticking for the regime.
Routes Around Hormuz Return
Saudi Arabia is also restoring an export route that avoids Hormuz entirely, with loading resuming at Yanbu, on the Red Sea, after the East-West pipeline restarted on September 22.
Trade sources estimate that 2 million barrels per day are now loading at the port.
The pipeline was shut down following September 11 drone attacks that were attributed to Iraqi militias. The repair work is ongoing, but oil is moving again.
It’s a lost point of leverage for Iran — but that doesn’t mean future attacks couldn’t cause more damage soon.
Iran’s Financial Cushion Is Disappearing
While Iran scrambles to disrupt those gains, its own income is diminishing, with sources of foreign revenue becoming vanishingly small.
The Wall Street Journal reported September 28 that Iranian crude aboard vessels outside the American blockade fell from about 29 million barrels in early September to 15 million.
And Kpler estimated those accessible supplies could run out by mid-October.
That concerns oil positioned beyond the blockade, not in Iran’s underground reserves, and as neighbors resume deliveries to global customers, Tehran’s shrinking stockpile is raising the financial cost of prolonging the confrontation.
Inflation is rising, the rial is plummeting in value, and Iran is running out of financial options.
About the Author: Jack Buckby
Jack Buckby is a British researcher and analyst specializing in defense and national security, based in New York. His work focuses on military capability, procurement, and strategic competition, and he produces and edits analysis for policy and defense audiences. He brings extensive editorial experience, with a career output spanning over 1,000 articles at National Security Journal, and has previously authored books and papers on extremism and deradicalization.
