Key facts
- Iran's oil exports fell to 209,000 barrels per day in May, the lowest in at least six years.
- A tightened US naval blockade is choking off crude shipments.
- China's demand for Iranian crude dropped to 1.1 million bpd in May.
- Iranian Light crude is offered at discounts to ICE Brent for the first time in two months.
- Inflation in Iran reached 77.2% year-over-year in May, with daily needs inflation at 113.8%.
- This inflation level is the highest since World War II.
Iran's oil exports have plummeted to approximately 209,000 barrels per day in May, marking a six-year low, as a tightened US naval blockade chokes off shipments. This decline is exacerbated by a significant drop in demand from China, Iran's primary crude buyer, which saw imports fall to 1.1 million bpd in May. Consequently, Iranian Light crude is now trading at a discount to ICE Brent for the first time in two months. The reduction in export revenue, estimated at $80 million per day or $2.5 billion per month, is severely impacting Iran's economy. Inflation has surged to 77.2% year-over-year in May, with prices for daily necessities like medicine and transportation rising by 113.8%. This level of inflation has not been seen in Iran since World War II. Analysts warn that if current trends persist, Iran could soon exhaust its available oil for export. The economic distress raises concerns about potential social unrest, reminiscent of past protests triggered by rising prices.