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future contracts say that oil must still be provided
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Some do -- but others just pay the difference between the price of the security and the price of oil when the security matures.
Sometimes there is physical oil involved which is stockpiled. But even that oil may never be delivered, because the contract that is due is exchanged for another contract for the future.
In any case the futures markets reflect monetization of risk. Iran realizes this, and this may be why they are threatening: the price of oil then rises, which causes certain nations to ignore sanctions and trade with Iran anyway.
[1] If you saw "Trading Places" you realize that when Frozen Concentrate Orange Juice futures are bought and sold, there may be no actual juice present, just a report of how the orange crop is doing.