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Iran’s latest proposal in negotiations offers no concessions and represents an Iranian effort to end the war on Tehran’s terms. The proposal, according to unspecified officials familiar with the matter speaking to the Wall Street Journal and an Iranian political analyst close to the regime, centers on a three-stage plan. In the first stage, the United States and Israel would commit to a permanent and guaranteed end to the war. In the second stage, the United States and Iran would negotiate over the status of the Strait of Hormuz, and the United States would lift its blockade on Iranian ports. Iran still aims to exert sovereignty over the Strait after the war by charging tolls on vessels passing the Strait and would seek to satisfy this demand in negotiations, according to the New York Times and Wall Street Journal. In the third stage, Iran and the United States would begin negotiating over the nuclear issue.
Iran’s growing challenges in storing and exporting its oil could be one mechanism by which Iranian calculations change in negotiations. A US Sanctions analyst at Foundation for Defense of Democracies assessed on April 12 that Iran had about 13 remaining days of usable oil storage, which he calculated based on 50 to 55 million barrels of total onshore storage that was 60% full on April 12. Iran likely extended the number of days before its oil storage is full by using old oil tanks in poor condition. Iran reactivated a 30-year-old very large crude carrier (VLCC) during April to hold oil, for example. The VLCC had been unused for three years. Market intelligence firm Kpler assessed on April 27 that Iran has between 12 and 22 remaining days before its oil storage is full. Kpler’s 12-day estimate assumes that not all storage tanks can be used, but the basis for that assumption is not clear. Iran has recently activated storage facilities that are suboptimal, but those storage facilities presumably have other costs for Iranian capacity and oil exports associated with them. US President Donald Trump posted on April 28 on Truth Social that Iran told the United States that it is in a “state of collapse” and that Iran wants an end to the US blockade as soon as possible.
Iran faces significant pressure on other parts of its economy. Combined force strikes during the war, as well as Iran’s difficulties with storing and exporting oil, have had negative ripple effects on other sectors of Iran’s economy. Reuters reported on April 27 that combined force strikes, including strikes on major Iranian steel producers such as the Mobarakeh Steel Company and Khuzestan Steel Company, reportedly destroyed about 25 to 30 percent of Iran’s total steel output. A chemical engineer working at one of Iran’s biggest private construction contractors told the Associated Press on April 28 that it had to shut down a project with Mobarakeh, which cost 1,000 jobs. The son of an Iranian rugmaker told AP that around 80% of rug and carpet manufacturers have stopped operations in the industrial zone of Kashan, Esfahan Province, due to the plummet of Iranian exports during the war. A US sanctions analyst assessed on April 27 that the US blockade has exacerbated Iran’s gasoline crisis by preventing Iran from importing gasoline to sufficiently address Iran’s fuel needs. Gasoline shortages previously caused mass protests in 2019.
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