Energy and resources experts agree that if the situation in Iran were to spiral out of control, it would have a massive impact on global oil markets and financial markets. This was not the case when Nicolás Maduro was ousted in Venezuela. The reason is simple: Iran produces roughly four times as much oil as Venezuela.

Andreas Goldthau, Director of the Willy Brandt School of Public Policy at the University of Erfurt, says:

“Iran is the third-largest producer in OPEC. Its output accounts for around 4% of global oil demand, while Venezuela produces only about 1%.”

The energy expert adds: “Iran is estimated to export around two million barrels per day, compared with no more than 350,000 barrels per day for Venezuela. Global markets would feel a much stronger impact if Iranian production were halted.”

In addition, fears of a regional conflict in the Gulf weigh heavily on the Iran outlook. Goldthau says: “Around half of the world’s oil reserves and a third of global oil production are located in the Middle East. As a result, political developments in Iran have a far greater impact on markets than events in Venezuela.”

OPEC statistics show that Venezuela’s estimated reserves of about 303 billion barrels are the largest in the world (one barrel equals 159 liters). However, these reserves consist largely of heavy crude that can only be extracted and refined using specialized technologies. A significant portion of this oil is also located in the remote Orinoco Belt.

Iran and Venezuela… international sanctions hinder the oil sector

Iran, like Venezuela, is subject to international sanctions on its oil sector. The country lacks access to the latest drilling and extraction technologies, while maintenance is costly due to shortages of spare parts and weak structural investment. In addition, the state controls the sector, making foreign investment more difficult, according to Goldthau. The same applies to refining operations.

He says: “Iranian refineries do not produce petroleum products of the quality expected by Western buyers. This, along with sanctions, is the result of Israeli and US attacks on Iran’s midstream sector.”

In the oil and gas industry, the midstream segment includes transportation, storage, and the initial processing of crude oil and natural gas after extraction. The US-based GPA Midstream association defines the role of companies in this segment as providing logistical efficiency and ensuring reliable delivery regardless of production fluctuations in countries such as Iran or Venezuela.

Remarkable resilience despite difficulties

Despite all these challenges, Goldthau describes Iran’s oil sector as having “shown a surprising degree of resilience,” at least in terms of output volumes, even though it has not returned to the six million barrels per day seen before the 1979 Islamic Revolution.

He says: “Production eventually recovered and stabilized at around four million barrels per day after falling to two million barrels per day in the 1980s. But the state treasury has been severely drained because Iran has for years been forced to sell its oil at steep discounts to secure buyers, preventing the investments the country desperately needed.”

Iran’s shadow fleet… a lifeline for oil smuggling

As with Russia, Iran’s covert fleet of oil tankers plays a central role in circumventing sanctions. Goldthau explains: “The Western sanctions regime has forced Iran to store part of its production. Tankers are increasingly being used to compensate for limited onshore storage capacity.”

These floating storage facilities are mostly located off Southeast Asia, close to major buyers, foremost among them China, which purchases more than 90% of Iran’s oil exports. Goldthau says: “Large volumes of Iranian oil are sitting offshore near Malaysia.” Tehran uses the National Iranian Tanker Company in these operations, which operates one of the largest tanker fleets in the world.

To evade sanctions, Iranian vessels operate in a manner similar to Russian ships, transferring sanctioned Iranian oil at sea to vessels that do not fly the Iranian flag, facilitating delivery to buyers.

Poverty instead of oil revenues

The social situation in Iran closely resembles that of Venezuela, where deteriorating oil infrastructure has worsened conditions, while energy subsidies consume the state budget and make it difficult for the government to provide affordable energy to the population.

The result is a fiscal crisis, a sharp currency depreciation, hyperinflation, and widespread protests.

One scenario in particular poses a serious threat to the ruling system in Tehran: if oil sector workers join the protest movement, it could signal the end of clerical rule. It remains unclear whether unrest has reached Khuzestan, Iran’s most important oil-producing region. Fortune magazine reported that it had seen no signs of a decline in oil exports.

Still, it is impossible to predict what might happen if oil workers respond to a strike call by Reza Pahlavi, the exiled son of Iran’s last shah. Oil strikes were the decisive factor in toppling the shah in 1978, when pressure escalated to the point that within months the monarchy collapsed and was replaced by Ayatollah Khomeini.

Could oil reach $120 a barrel?

If the Islamic Republic of Iran were to collapse, the regional balance of power would change dramatically. Mark Mobius, a pioneer in emerging market investing, warns: “The best outcome is a complete regime change. The worst is a prolonged internal conflict with the current regime remaining in place.”

If Iranian production were disrupted, oil prices would surge sharply in the short term. Over the longer term, however, other producers could fill the gap left by Iran. The International Energy Agency could also release strategic oil reserves to calm markets, according to Goldthau.

He cautions, however, that the greatest risk lies in the possibility of “dragging regional actors into the conflict.” If Iran were to close the Strait of Hormuz — a narrow waterway through which around 25% of global oil flows — oil prices could rise to as much as $120 a barrel, according to estimates by investment banks such as JPMorgan Chase.

Drilling platforms and oil refineries in neighboring countries could also come under attack, further affecting energy markets. Goldthau warns that with around 20% of global liquefied natural gas production also passing through the Strait of Hormuz, any such escalation could drive gas prices higher in Europe.

US stock indices rose during Thursday’s trading, supported by a rebound in semiconductor shares.

As corporate earnings continue to flow, several Wall Street banks reported their quarterly results today for the final quarter of 2025, including Goldman Sachs, Wells Fargo, and Bank of America.

In trading, the Dow Jones Industrial Average rose by 0.7%, or 375 points, to 49,525 points by 17:37 GMT. The broader S&P 500 climbed 0.6%, or 42 points, to 6,969 points, while the Nasdaq Composite advanced 0.8%, or 185 points, to 23,657 points.

Palladium prices fell during Thursday’s trading, amid a stronger dollar against most major currencies, in addition to profit-taking sales.

With strong demand for platinum group metals (PGMs) continuing, the global research division at Bank of America Securities raised its 2026 platinum price forecast to $2,450 per ounce from a previous estimate of $1,825, and also lifted its palladium forecast to $1,725 per ounce from $1,525.

Key takeaways from the bank’s weekly Global Metals Markets report dated January 9 showed that trade-related disruptions to PGM flows continue to keep markets tight, particularly the platinum market. The report also noted that China’s platinum imports are providing additional price support.

Although a supply response is likely, the bank expects it to be gradual, citing what it described as “production discipline and mine supply inelasticity.”

These forecasts come as platinum and palladium prices continue to rise this year, with spot prices reaching $2,446 per ounce for platinum and $1,826 per ounce for palladium.

As a result, both metals have exceeded the bank’s previous forecasts, prompting it to revise its price estimates upward.

In a statement to Mining Weekly, the bank said: “We continue to expect platinum to outperform palladium, supported by persistent market deficits.”

The bank explained that US tariffs have had a clear impact on several metals markets, and that the risk of additional tariffs continues to loom over PGMs.

This has been one of the factors behind rising inventories at the Chicago Mercantile Exchange, alongside a surge in exchange-for-physical (EFP) transactions.

Palladium EFP activity recorded stronger performance, driven largely by growing concerns that the United States could impose tariffs on Russian palladium, amid ongoing anti-dumping and countervailing duty investigations.

In this context, the bank said the US Department of Commerce had estimated the dumping margin for unwrought Russian palladium at around 828%.

The bank noted that imposing tariffs on as-yet undisclosed Russian volumes could push domestic prices higher, given that Russia is a major supplier of palladium.

Chinese import demand boosts price support

Outside the United States, China has provided additional support to prices. Early in 2025, a sharp recovery in jewelry sector activity attracted more ounces into the Chinese market. With gold prices at record highs, this development is particularly significant, as substituting just 1% of gold jewelry demand could increase the platinum deficit by around one million ounces, equivalent to nearly 10% of total supply.

In the second half of 2025, the launch of physically backed platinum and palladium futures contracts on the Guangzhou Futures Exchange (GFEX) provided further support to prices.

These contracts represent China’s first domestic hedging instruments for PGMs denominated in renminbi, and they allow for physical delivery of both bars and sponge metal. The bank said that the availability of physical liquidity was a key driver behind the price rally seen in December.

China’s palladium imports have also quadrupled since September compared with last year, which the bank described as difficult to explain fundamentally given the ongoing phase-out of internal combustion engines, suggesting the increase is largely linked to the launch of palladium futures contracts on the Guangzhou exchange.

Gradual supply response expected

With PGM prices now trading above marginal production costs and incentive prices for investment, markets are closely watching for a supply response.

The bank said: “We expect any response to be measured. Producer margins — particularly in South Africa and North America — have been under sustained pressure over the past two years, which may encourage caution in expanding output.”

As for new supply, increases are likely to emerge only gradually, given the long lead times required to move from development to stable production levels.

Many ongoing projects represent incremental expansions or phased increases in output, rather than sources of large and rapid supply growth.

On the supply side, production issues in South Africa tightened the platinum market in 2025. Mine output in the country fell by about 5% year on year between January and October 2025, mainly due to operational problems such as flooding and plant maintenance in the first quarter. The bank expects a modest recovery in South African platinum production this year, but not enough to eliminate the market deficit.

In Russia, the world’s largest palladium supplier, output also faced challenges as Norilsk Nickel transitioned to new mining equipment and experienced changes in ore composition. As a result, the company’s platinum output fell by 7% and palladium output by 6% year on year during the first nine months of 2025. As these temporary disruptions fade, Russian PGM production is expected to recover this year, potentially limiting the pace of palladium price gains.

While high prices can incentivize higher supply, the bank believes additional volumes are more likely to come from mine life extensions and project restarts, rather than rapid and large-scale capacity expansions.

In practice, most new supply requires several years to move from construction to full production, and many projects currently under development are incremental or phased expansions rather than immediate sources of large additional volumes.

The bank noted that two major new projects moving toward production — Ivanhoe Mines’ Platreef project and Wesizwe’s Bakubung project in South Africa — are expected to add a combined 150,000 ounces of platinum and 100,000 ounces of palladium during the current year.

Other expansion projects remain longer-dated and dependent on final investment decisions. Among them is Valterra Platinum’s Sandsloot underground project at the Mogalakwena mine, which is not expected to reach an investment decision before 2027, with underground ore extraction potentially starting after 2030.

Meanwhile, the dollar index rose by 0.2% to 99.3 points by 16:04 GMT, hitting a high of 99.4 and a low of 99.09.

In trading, March palladium futures fell by 3.3% at 16:05 GMT to $18415 per ounce.

Bitcoin rose on Thursday, extending its recent recovery as markets assessed a proposed US bill aimed at establishing a regulatory framework for the cryptocurrency sector.

The world’s largest digital currency resumed gains after a slow start to the year, following a disclosure by Strategy, the largest institutional holder of Bitcoin, of a major purchase this week. However, Bitcoin remained below the key psychological level of $100,000, as pressure on risk appetite toward digital assets persisted.

Bitcoin rose 1.4% to $96,370.1 by 00:05 US East Coast time (05:05 GMT), marking its strongest level in two months.

US Senate delays cryptocurrency bill after Coinbase opposition

The US Senate Banking Committee said on Wednesday that it had postponed discussions on a proposed bill to regulate cryptocurrencies, just hours after Brian Armstrong, Chief Executive Officer of Coinbase Global, voiced opposition to the measure.

Senator Tim Scott said in a post on social media that the discussion of the bill, which had been scheduled for Thursday, was delayed.

In an earlier post on Wednesday, Armstrong criticized the bill, saying Coinbase could not support it in its current form.

Armstrong took issue with several provisions in the proposal, including a suggested ban on tokenized equities, restrictions on decentralized finance, a reduction in the oversight role of the Commodity Futures Trading Commission, as well as “draft amendments that would eliminate stablecoin rewards.”

Armstrong said: “This version is far worse than the status quo. We would rather have no law at all than pass a bad law,” criticizing the bill despite its bipartisan backing.

Coinbase was among the largest donors during the 2024 US election cycle to crypto-supportive entities, and is a key party in negotiations surrounding the bill, given that it is the largest cryptocurrency trading platform in the United States.

The cryptocurrency industry has long called for a comprehensive regulatory framework, seeking clarity on whether digital assets should be classified as securities or commodities.

Cryptocurrency prices today: altcoins lag as risk appetite remains weak

Other cryptocurrency prices lagged Bitcoin’s gains and remained under pressure amid continued weakness in overall market risk appetite.

Global geopolitical tensions remain elevated, as investors watch for any potential additional US intervention in Venezuela and Iran.

Despite Bitcoin’s recovery, it continued to trade at a discount in US markets, particularly on Coinbase, compared with global averages. This trend, which has persisted since mid-December, points to continued weakness in retail investor demand.

Among altcoins, Ether, the world’s second-largest cryptocurrency, fell 0.6% to $3,312.22. XRP declined by 2.4%, while BNB slipped by 0.5%.