Why Iran Matters More Than Venezuela: Energy Security & Global Geopolitics Explained

Why Iran Matters More Than Venezuela: Iran's pivotal role in global energy security stems from its control over the Strait of Hormuz, vast reserves of high-quality oil and natural gas, and significant influence in Middle Eastern geopolitics.

Table of Contents

Context

Rising Iran-US conflict matters more for the world economy and geopolitics than similar tensions elsewhere, such as in Venezuela, and energy security lies at the heart of these concerns

Iran’s Strategic Importance in Global Energy

Major Oil & Gas Reserves

Iran holds about 10% of global proven oil reserves (~1.2 trillion barrels) and 15% of global gas reserves, making it a key energy power.
It produces roughly 3.3–3.6 million barrels per day, around 3% of global crude output.
Some of its largest oil fields include Ahvaz, Marun, Gachsaran, and Aghajari fields — critical regional assets.

Export Significance

Iranian oil contributes significantly to export earnings and is a key source of foreign exchange.
Oil from Iran historically flows mainly to Asia — China, India, South Korea and Japan — linking it to major energy markets.

Geopolitics: Why Iran Matters More Than Venezuela

A conflict involving Iran has far greater potential global impact than one in Venezuela due to Iran’s share of energy exports and control of a key shipping chokepoint.

Oil Quality and Location

Iranian oil is high-quality crude that is cheaper to produce than Venezuela’s heavier, harder-to-refine oil.
Its geographic position near Asia and Europe enhances its strategic export value.
Venezuela’s oil sector is less integrated into global supply networks, so disruption there causes comparatively smaller global price effects.

Regional Power Projection

Iran’s military reach spans the Persian Gulf, and it can threaten key maritime routes, including the Strait of Hormuz.
Venezuelan interventions primarily affect Western Hemisphere dynamics; Iran’s conflict could destabilise Middle East security and involve multiple regional actors.

The Strait of Hormuz

Energy Trade Lifeline: About 18–20 million barrels per day of oil and petroleum products — roughly 20–27% of global maritime oil trade — passes through the Strait. Nearly 20% of global LNG trade also transits this narrow channel.
Risk of Disruption: If Iran or conflict parties interfere with shipping in the Strait, oil and gas supply to global markets could be severely disrupted.
Analysts warn that even threats to close the Strait push energy prices sharply higher due to fear premiums.

US Objectives in the Region

Preventing Nuclear Proliferation: A key US goal is to stop Iran from developing nuclear weapons capability and to secure a deal that limits Iran’s nuclear program through negotiations or pressure.
Containment Strategy: The US aims to restrain Iran’s ballistic missile program and its support for proxy groups in the region.
Energy Market Stability: Despite security goals, the US is also highly sensitive to energy price spikes that could harm its own economy, influencing its reluctance to pursue full-scale military action.
Diplomacy and Pressure: Recent diplomatic engagement (e.g., talks in Oman) reflects an attempt to balance pressure with dialogue to manage tensions without large-scale conflict.

Reasons for Iran’s pursuance of nuclear weapons

Symbol of Leadership: Iran positions itself as a revolutionary and ideological leader in the Islamic world—particularly in contrast to Sunni powers like Saudi Arabia.
Symbol of commitment to scientific research and advancement: Nuclear weapons as civilizational and technological achievement.
Core Motivation: Security guarantee and nuclear deterrent against the USA and other belligerent powers in its neighbourhood. Iran is surrounded by real and perceived threats:

U.S. military presence in the Gulf, Iraq, and Afghanistan.
Hostile regional powers (Israel, Saudi Arabia, UAE).
History of invasion (e.g., Iraq’s 1980 attack on Iran, and the 1953 CIA-backed coup).

Global Implication of US-Iran conflict

Regional Destabilization: Intensified conflict risks dragging other Gulf states into war, undermining regional security architecture.
Threat to Multilateralism: Unilateral action of US against Iran sidelining the UN, UNSC weakens multilateralism.
- It gives authoritarian states justification to do the same—bypassing international law (e.g., Russia in Ukraine, China in Taiwan Strait).

Push back diplomatic efforts: Nuclear talk will take back stage between Iran and USA as Iran refused to talk on table due to its disrespect to sovereignty.
Nuclear Proliferation Threat: Incomplete destruction of Iran’s nuclear sites may push Tehran to accelerate weaponization clandestinely.
- E.g. Intelligence suggest that despite the directly intervention of US in the conflict (“Operation Midnight Hammer”) with bunker-buster bombs, the bomb making capability is not diminished
Global Polarisation: The conflict may widen rifts between Western powers and nations backing diplomatic restraint like China and Russia.

Impact on India

- Balancing the foreign policy: India will be in tightrope to balance the foreign policy in the West Asia due to US-Iran ConflictIndia has strategic partnership with Iran as well as
- Ties with the Gulf Region: West Asia is the source of 40% of its remittances, 54% of oil imports and the region accounts for over $170 billion in trade.
- Energy Security: Any escalation in West Asia will have a direct impact on energy security as 40-50% of India’s energy imports come through the area.
Diaspora issues:

Safety and security of Indian in conflict ridden areas will be impacted
Arranging work and study opportunities who are coming back or they end up returning to the conflict zones
Decrease in Remittance from these countries.
Financial impact:
Inflation: If the Strait of Hormuz is closed it could sharply increase oil and LNG prices.
Exports: Shipping costs, security, and insurance premiums would rise, leading to more costly imports, less competitive exports, and inflation.
Connectivity plans: IMEC, INSTC and Chabahar port project will be impacted
Disruption in Trade: Due to conflict in the gulf region trade declined. It further can decline in recent events.