Synopsis: Global oil markets are strained by U.S. intervention in Venezuela’s vast reserves and Middle East conflict disrupting Hormuz shipments, as the world’s largest oil holders from Venezuela to the U.S face geopolitical risks and supply volatility.
Oil remains the cornerstone of the global energy sector, powering transportation, industries, and electricity generation while fueling economic growth worldwide. Its strategic importance lies not only in meeting energy demand but also in shaping geopolitics, trade, and national security.
Countries with vast reserves, like Venezuela, Saudi Arabia, and Iran, hold significant influence over global markets, making oil a critical resource for both economic stability and international power dynamics.
Venezuela’s Oil Conflict
In early 2026, U.S. President Donald Trump ordered a major military operation in Venezuela that resulted in the capture and removal of President Nicolas Maduro, an action Trump described as part of a campaign to increase U.S. influence and secure access to Venezuela’s vast oil reserves.
Following the operation, Trump stated the United States would “run” Venezuela on an interim basis until a transition could be arranged, prompting international concern over sovereignty and legality. The U.S. has also increased pressure on Venezuela through legal actions against its interim leadership and efforts to control oil exports, while Venezuelan authorities have condemned these moves as illegitimate and a threat to regional stability.
Oil Prices & Market Impact
Ongoing conflict involving Iran, the United States, and Israel has severely disrupted shipping through the Strait of Hormuz, a chokepoint that carries about 20–30% of the world’s oil supply.
Fears of blockage or closure have already pushed Brent crude prices above $80 per barrel and prompted forecasts of further increases if disruptions persist, as insurers pull coverage and tanker traffic collapses. Traders and analysts warn that sustained disruption could send prices into the $90–$100+ range, tightening global supply and fueling price volatility.
Potential Oil Supply Disruptions
Ongoing military strikes by the United States and Israel on Iran, and Tehran’s retaliatory attacks, have heightened geopolitical risk in the Middle East which is a region crucial to global energy flows.
Markets are already reacting with sharp rises in crude prices, largely because this conflict threatens the Strait of Hormuz, a narrow waterway through which about 20% of the world’s oil and gas supply normally passes.
If the strait’s operations are disrupted or tanker traffic is reduced, global oil supply could tighten significantly, pushing up prices further and creating ripple effects on energy costs worldwide. Such disruptions would not just affect markets but could also raise fuel import bills and inflation pressures in major oil‑importing countries.
The United States has issued a temporary 30‑day waiver allowing Indian refiners to purchase Russian crude oil that is currently stranded at sea, in a bid to ease global energy market disruptions caused by the ongoing Iran–U.S.–Israel conflict in the Middle East.
Indian state refiners are in discussions with traders to purchase Russian crude for prompt delivery, according to sources cited by Reuters. About 20 million barrels of Russian oil have already been bought by these refiners. For some, these purchases mark a return to Russian supply, with the last shipments received in November. Traders are offering Russian Urals crude at a premium of USD 4–5 per barrel over Brent for cargoes arriving in March and early April.
Countries with the largest oil reserves
The table below lists the countries with the largest proven oil reserves
| Rank | Country | Proven Oil Reserves (Million Barrels) |
|---|---|---|
| 1 | Venezuela | 303,221 mb |
| 2 | Saudi Arabia | 267,200 mb |
| 3 | Iran | 208,600 mb |
| 4 | Canada | 163,440 mb |
| 5 | Iraq | 145,019 mb |
| 6 | United Arab Emirates | 113,000 mb |
| 7 | Kuwait | 101,500 mb |
| 8 | Russia | 80,000 mb |
| 9 | Libya | 48,363 mb |
| 10 | United States | 45,014 mb |
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