The turmoil in Iran has the Texas energy industry wondering what’s next with the volatile nation producing three to four million barrels of oil per day and prices having upticked a little.
Waco economist Ray Perryman says the situation will probably not be a major factor for prices over time unless it escalates or improves dramatically.
Ray Perryman
“While there has been a crackdown on oil shipped out of Iran illegally with some effects on supplies, I expect the industry to adjust given production in other areas,” Perryman said. “The situation in Iran is more a humanitarian crisis than an energy one, particularly given the recent escalation.
“Clearly the current regime has been hard on the people of Iran in addition to supporting terrorism in other areas.”
While the country has sizable oil reserves, he said, it is not at a level to move the needle in world markets without major investment and infrastructure improvement.
“The situation at present doesn’t suggest that is likely to happen in the near future,” Perryman said.
Odessa oilman Kirk Edwards says Iran matters more than Venezuela right now, especially for the Permian Basin.
“The Venezuela headlines are grabbing attention, but from an oil market, investment and oilfield jobs standpoint, Iran is the far more consequential story for 2026 and for the Permian Basin,” Edwards said.
“Here’s why energy investors and service companies should be watching Tehran more closely than Caracas: Iran’s barrels actually matter to global balances because Iran is still producing roughly 3-4 million barrels per day and exporting a meaningful portion of that into global markets, even under sanctions.
“Those barrels are real, current and priced into today’s supply-demand balance. Venezuela by contrast has already been functionally sidelined.
“Its production has been broken for years, infrastructure is degraded and any recovery even under a new regime would take years and tens of billions of dollars, not weeks or months.”
If the Iranian regime weakens or falls in the coming weeks, Edwards said, the downside risk will be asymmetric.
Kirk Edwards
“Production could be disrupted or halted quickly, exports could be interrupted by labor unrest, sanctions snapback or internal chaos and insurance, shipping and payments could freeze overnight,” he said. “That’s not a slow decline, that’s barrels potentially disappearing from the market.”
Edwards said the Strait of Hormuz is the real wild card because Iran is there where 20% of the world’s crude flows.
“Even threats to shipping there inject a risk premium into oil prices,” Edwards said. “Venezuela simply doesn’t have that leverage.”
