After six months of war, escalating sanctions and a continued U.S. naval blockade, Iran’s oil and gas industry is facing increasing pressure, with a sharp decline in new cargo loading and rising stocks inside the country, which could prompt Tehran to reduce production of a number of fields or temporarily halt some wells.
And according to data from the energy information company "Kepler", during August 2026, tankers continued to discharge about one million barrels per day of Iranian oil in China, but a large part of these quantities left Iran before the tightening of the blockade, and remained stored on tankers spread in Asian waters.
And Hamayun Falkshahi, a senior analyst at Kepler, said that between 30 and 40 million barrels of Iranian oil are still stored on tankers outside the blockade.
Load Collapse
According to Kepler data, Iran’s oil load has declined from about 1.83 million barrels per day in March, coinciding with the start of the war, to about 255,000 barrels per day in August, about one-seventh of the level recorded at the beginning of the crisis.
And Reuters reported that no large shipment of Iranian crude has crossed the Strait of Hormuz toward China since the reimposition of the U.S. naval blockade on July 14, and that quantities that arrived in China after that date were mostly loaded before maritime restrictions were tightened.
And the impact of the crisis was not limited to exports, as Kepler estimated that Iran's crude oil production fell from 3.24 million barrels per day in March to about 1.755 million barrels per day in August, a decline of about 46%.
Condensate production also dropped from about 800,000 barrels per day at the beginning of the year to about 625,000 barrels per day.
Despite the production cut, the total oil in Iran's onshore terminals, refineries and reservoirs increased from about 58.2 million barrels on July 14 to 67.4 million barrels by the end of August.
The continued accumulation of oil, coupled with faltering exports, means storage capacities may reach their limits, gradually transferring pressures to production facilities, fields and wells.
Which fields will stop first?
Energy experts say Iran will be forced to selectively cut production by reducing or shutting down some wells in exchange for preserving fields whose stoppage could lead to greater losses or technical and strategic risks.
And Tehran is likely to prioritize three main groups of fields:
First, the fields shared with neighboring countries, including Azadegan and Yadavaran along the Iraqi fields, the Farouzan field shared with Saudi Arabia, and the Salman field, the other part of which is located in Emirati waters.
And these fields are especially important because continued production on the opposite side of the border, in conjunction with a reduction on the Iranian side, could lead to economic and strategic losses for Tehran.
Second, the deep reservoirs known as the “Bengistan Group”, which are mainly composed of carbon rocks, and the oil flows inside them through a network of natural cracks, making their production more sensitive to pressure drop and flow stop.
Third, fields that rely on injecting gas into reservoirs to maintain pressure and push oil toward production wells. And disruption or misalignment of injection programs with production cuts may complicate later production recovery.
And in turn, Asmari’s reservoirs in Ahvaz, along with the Maroun, Gachsaran and Bibi Hakima fields, are likely to bear a larger share of the cuts, due to their operational flexibility compared to more sensitive reservoirs.
And because Asmari’s reservoirs mostly produce light oil, cutting their output could reduce Iran’s light crude supply at a greater rate than heavy crude.
Are wells permanently damaged?
Eric McKay, a professor of geoenergy engineering at Heriot-Watt University, said a long pause usually does not directly damage the reservoir and does not necessarily reduce the amount of recoverable oil.
And he added that the production of some wells may rise temporarily after re-operation, as a result of the separation of water from oil during the downtime, but the main danger is related to the decline in maintenance work due to the cessation of production and revenues.
Low-pressure wells or wells that produce large amounts of accompanying water may need additional pumps or maintenance and treatment processes before they can be put back to work.
And the difficulty and cost of restarting increases the longer the downtime lasts, and in some cases it may even be that drilling a new well is less expensive or risky than restarting an old one, Mackay explained.
To limit these repercussions, the National Iranian Oil Company has in previous periods resorted to taking the wells out of service alternately instead of closing entire fields, so that one well does not stop for more than a few weeks.
This mechanism allows engineers to measure the volume of production that can be restored and avoid long shutdowns, but it raises operational expenses as a result of repeated intervention in wells and re-adjustment of facilities.
Energy researcher Robin Mills believes that the production halt is not expected to cause permanent and significant damage to Iran's oil capacity, because traditional fields in the Middle East endure closure and reoperation better than resources of super-heavy oil or shale oil.
Condensate crisis threatens South Pars gas
The risks are not limited to oil, as Iran faces a more complex challenge in the South Pars gas field.
The crude gas extracted from the field contains condensates and heavy hydrocarbons that separate after being transported to the coastal processing plants. And if condensate cannot be exported, stored, or consumed domestically, Iran may have to cut back on gas production itself to prevent its buildup.
Najat Rahmanian, an associate professor of chemical and petroleum engineering at Bradford University, said Iranian refineries could absorb a fraction of the condensate, but the size of the quantities that could be processed was linked to each refinery's design and excess capacity.
These restrictions come at a time when the natural pressure of the South Pars reservoir is declining as a result of years of extraction, while the Iranian Oil and Gas Company is working on a project to boost pressure and install offshore compressors to keep the gas flowing.
Rahmanian warned that long pauses, frequent extinguishing and restarting of facilities could make it difficult to return to stable production, as well as increase the consumption of turbines and compressors.
And "Kepler" had estimated in a previous report that the production capacity of condensates decreased by between 100 and 120 thousand barrels per day, as a result of the damage to five stages of South Pars as a result of Israeli attacks, expecting this decline to continue for at least six months.
And the latest data show that condensate production in August was about 175,000 barrels per day lower than its level in January 2026, but this decline came as a result of a set of developments, and cannot be fully linked to the damage to the five stages.
Implications for Electricity, Industry and Agriculture
Reducing gas production could reduce volumes entering South Pars refineries and knock some processing units out of service, while restarting them would require safety checks, balancing system pressures, fitting out turbines and compressors, and returning operational teams.
South Pars gas is distributed among domestic consumption, power plants, industries, petrochemicals, and exports, in addition to using part of it in injecting old oil fields in southern Iran, including the Aghajari field.
And cutting gas injection for a long time would affect reservoir pressure and oil production, while reducing the supply of petrochemical plants could reduce chemical fertilizer production and put pressure on the agricultural sector.
Gas shortages also threaten fuel supplies to power plants, affecting factories and homes. And Iran may use fuel oil to make up for part of the shortfall, but that will lead to higher levels of pollution.
And while some well and facility problems can be contained through engineering measures, experts say the quickest and most direct fallout will be felt by consumers, because any shortage of gas for homes, electricity and industry needs immediate compensation from other sources.
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