Iran’s oil lifeline is drying up. The biggest pain may fall on ordinary citizens

A US naval blockade is threatening to cut off Iran’s seaborne oil income, with energy intelligence firm Kpler estimating that its trackable floating oil inventory outside the blockade zone has fallen to zero. The resulting cash squeeze could weaken the government’s finances, but analysts say it may not quickly constrain the military: Tehran could protect defence spending while ordinary people bear more of the economic strain.

Oil accounts directly for about 30% of Iran’s government budget, while oil and refined petroleum products may provide 50% to 60% of regime revenue when indirect income is included. Iran had expected to export around 1.7 million barrels a day at roughly $54 per barrel, but exports have fallen short; Kpler projects oil revenues could dry up by mid-December as outstanding payments are settled. Analysts describe that date as a cash-flow disruption rather than an imminent collapse, with likely consequences including reduced subsidies and other civilian spending, more borrowing and higher inflation. The article also says the armed forces receive oil allocations, reportedly around 200,000 barrels a day, which they can sell to fund their activities.