Hello again Power Up readers,
Another week, another country? While the dust slowly settles on the U.S.-led raid to oust Venezuelan President Nicolas Maduro, attention in the energy markets has already turned to another important oil producing nation: Iran. U.S. President Donald Trump has threatened to intervene in the country after escalating anti-regime protests were met by a deadly crackdown over the past week.
It is still unclear if the U.S. will take military action against Iran in response to the unrest. What’s certain is that Iran is a big fish in the oil world, certainly bigger than Venezuela in terms of production. The Islamic republic produces around 3.3 million barrels per day, around 3% of global output, and exports around 1.4 million bpd, mostly to China. Venezuela, by contrast, produces less than 900,000 bpd.
Crucially, Iran controls one side of the Straits of Hormuz, a maritime chokepoint through which nearly a fifth of the world’s oil and gas flows. Any escalation in Iran would therefore raise concerns about disruptions in Hormuz, even though such activity has rarely occurred in the past, as I wrote during last year’s 12-day Israel-Iran war.
But let’s go back to Venezuela. Since our last newsletter, President Trump held a big televised gathering with the leaders of the largest U.S. and European energy producers and traders to discuss the future of Venezuela’s crumbling oil industry.
On the face of it, the meeting was a win for the U.S. president. It projected a sense of urgency, and Trump received lavish praise from many executives around the table.
But the meeting was far from a ringing endorsement of Trump’s ambitions to see energy giants pour $100 billion into Venezuela's oil industry, with the executives injecting a heavy dose of realism into the plan. More on this below.
Here are a few more energy-related headlines:
