Why Iran’s fate means more to oil markets than Venezuela’s in Oil & Companies News 20/01/2026 While markets appeared barely fazed by the fate of Venezuela’s oil industry, they are considerably more nervous about the potential impact of internal unrest and foreign escalation when it comes to Iran. Rightly so? Energy and resources experts agree — if the situation in Iran gets out of control, it will have a massive impact on global oil and financial markets. That was not the case after the removal of Nicolas Maduro in Venezuela. Then again, Iran produces four times as much oil. “Iran is the third-largest producer in OPEC. Its output covers roughly 4% of global demand. Venezuela only produces about 1%,” says Andreas Goldthau, director of the Willy Brandt School of Public Policy at Germany’s University of Erfurt. “Iran is estimated to export about 2 million barrels a day, in Venezuela it’s only 350,000,” the energy expert continues. “Global markets would feel it far more intensely if Iranian production stopped.” Moreover, fear of regional conflict in the Gulf weighs heavily in Iran’s case. “Roughly half of the world’s oil reserves and a third of global oil production is in the Middle East. Political developments in Iran impact markets far more significantly than those in Venezuela,” says Goldthau. OPEC statistics calculate Venezuela’s estimated 303-billion-barrel reserves as the world’s largest (1 barrel = 159 liters, 55 gallons). But those reserves are full of heavy crude that can only be pumped and refined with specialized technology. A large percentage of that oil is also located in the remote Orinoco Belt. Iran and Venezuela both hampered by international sanctions Iran, like Venezuela, suffers from international sanctions on its oil industry. It doesn’t have access to modern drilling and extraction technology, and maintenance is costly due to a lack of replacement parts and inadequate structural investment. Furthermore, the state controls the industry, making foreign investment more difficult, says Andreas Goldthau. The same goes for processing. “Their refineries are not producing petroleum products of the quality that Western buyers expect. That, beyond sanctions, is the result of Israeli and US attacks on Iran’s ‘midstream’ sector.” In the oil and gas sector that means transport, storage and initial processing of crude and natural gas after extraction. The US-based GPA Midstream Association defines the work of midstream companies as providing logistics efficiency and dependable delivery regardless of production swings in countries like Iran or Venezuela. Despite its problems, Iran’s oil sector has proven astonishingly resilient, says Goldthau — at least in terms of the volume being pumped out of the ground, though it has never matched the 6 million barrel mark the country was producing before the Islamic Revolution of 1979. “Production ultimately recovered and stabilized at around 4 million barrels a day after falling to 2 million a day in the 1980s. Still, state coffers are taking a beating because Iran has for years been forced to sell its oil at a discount to secure buyers. And that has kept much-needed investments from being made.” Iran’s shadow fleet key to moving contraband oil As is the case with Russia, Iran’s shadow fleet of oil tankers plays a key role in sanctions evasion. “The Western sanctions regime has forced Iran to store part of its production. Increasingly, tankers have been employed to compensate for limited capacit