Iran has generated more than $23 billion in oil revenues during the first half of 2026, exceeding its own pre-war forecasts despite a U.S. naval blockade and renewed sanctions. According to Obsidian Risk Advisors sanctions specialist Brett Erickson, Tehran leveraged high global oil prices and a “shadow fleet” to outpace its projected $35.5 billion annual target.
Why did the U.S. blockade fail to stop Iranian oil revenue?
The U.S. blockade of Iranian ports, which came into effect on April 14, Australian time, aimed to force a shutdown of oil production by filling storage capacity. However, Brett Erickson of Obsidian Risk Advisors notes that Iran anticipated this by ramping up production and shipping millions of barrels to other parts of the world before the war started in late February.
By using ship-to-ship transfers, Tehran stored oil far from home, beyond the reach of U.S. warships. Kpler data shows that by early May, Iran was storing more than 180 million barrels of oil at sea. This buffer allowed sales to continue even while the blockade trapped other vessels inside the Gulf of Oman.
How did war actually increase Iran’s oil profits?
Economic pressure often has the opposite effect on oil-exporting regimes during crises. According to Brett Erickson, the war created scarcity that drove prices up. Before the conflict, Iran sold sanctioned oil at a discount for about $53 per barrel.
By May, while the blockade was active, the price for Iranian oil jumped to $117 per barrel. This price surge allowed Tehran to over-achieve its revenue projections by about 30 per cent for the first half of the year. Erickson points to an Iranian budget bill from late last year that forecasted exports of 1.77 million barrels per day at 55 USD per barrel.
Revenue Comparison: Projected vs. Actual
| Metric | Pre-War Forecast | First Half 2026 (Est.) |
|---|---|---|
| Oil Price per Barrel | $53 – $55 | Up to $117 |
| Total Revenue | $35.5B (Annual) | $23B (6 Months) |
What happens to the Strait of Hormuz now?
The Strait of Hormuz remains a primary leverage point. Neil Quilliam, an energy policy specialist and associate fellow at the Middle East North Africa program in Chatham House, states that Iran will not cede control of the waterway because doing so would mean losing a major point of leverage against the U.S.
Marine intelligence firm Windward reports that the waterway is “functionally contested again” following U.S. strikes and Iranian attacks on commercial vessels. After two tankers were hit, Windward observed six vessels rerouting to a central corridor closer to Iran, while one LNG tanker carrying nearly 1 million barrels halted its journey.
Will the return of U.S. sanctions work?
Washington revoked General Licence X on July 17, ending a window that authorized the sale of Iranian oil. President Donald Trump vowed to hit the regime “hard” after strikes on commercial ships, which the U.S. called “wholly unacceptable.”
However, the effectiveness of these sanctions is debated. Brett Erickson argues that the economic warfare “backfired” because it triggered the very price spikes that funded the Iranian regime. While the blockade caused damage to other sectors of the Iranian economy, the oil sector remained resilient due to the lack of a physical blockade currently in place.
Frequently Asked Questions
Who is controlling the Strait of Hormuz?
Iran currently exercises coercive control over the strait, according to Neil Quilliam of Chatham House, and uses it as leverage in negotiations with the U.S.
How much oil did Iran store at sea?
According to Kpler, Tehran was storing more than 180 million barrels of oil at sea by early May to bypass the U.S. blockade.
What was the impact of the MOU on oil shipments?
Brett Erickson notes that Iran moved about 55 million barrels out of the region in the first 14 days of the MOU, effectively resetting its storage capacity.
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