Assessment of the Impact of Iran's Economic Turmoil and Protests on the Global Energy Market and Oil Investments

Based on market data as of 2026-01-01 and public information since the end of 2025, I conduct the following systematic assessment of the potential impact of Iran’s economic turmoil and protest activities on the global energy market and oil investments. All market data and references are sourced from brokerage APIs or retrieved public reports.

1. Overview of Current Iran Situation (Based on Public Information and Retrieved Data)

• Scale and Causes of Protests: Multiple reports show that in late December 2025, Iran broke out in large-scale economic protests since 2022, with vendors in many places (Tehran, etc.) going on strike and spreading to university campuses [1][3][5]. The trigger was severe inflation and sharp currency depreciation: the Rial fell to a historic low range against the USD (reports indicate approximately 1.42–1.45 million Rials per USD) [1][3][5]; the December inflation rate remained high (reported at ~42.2%, reaching as high as 48.6% in October) [2][5].
• Government Response: Public reports indicate that the Governor of the Central Bank of Iran has resigned, and the President has promised economic and exchange rate reforms, emphasizing dialogue with protesters [1][3][5].
• Geopolitical Aspect: There are risk events in the Strait of Hormuz (e.g., reports mention the Islamic Revolutionary Guard Corps’ ship seizure incident) [7], and during past Israel-Iran conflicts, there were market concerns about “blocking the strait”, but oil prices rose relatively moderately during the actual 2025 conflict (some data shows an increase of about 12%) [7][9].

2. Iran’s Position in the Global Oil Market (Based on International Agency Data)

• Production and Exports: The International Energy Agency (IEA) December 2025 report shows that Iran’s crude oil production is approximately 3.5 million barrels/day, and oil “loading/export volume” has remained around 1.9 million barrels/day in recent months [4]. The data also suggests that Chinese independent refineries have suspended some purchases due to exhausted import quotas, which may affect the market absorption rhythm of Iranian oil [4].
• Geographical Chokepoint: The Strait of Hormuz handles approximately 1/5 of global oil and natural gas transportation volume [7][9], but actual interruptions have been extremely rare historically, and most geopolitical tensions have not led to long-term, large-scale supply disruptions [7][9].

3. Current Performance of Crude Oil and Energy-Related Assets (Based on Tool Data)

• Crude Oil Spot and Futures: As of the close on 2026-01-01, brokerage API data shows WTI at ~$57.42 (-0.91%) and Brent at ~$60.85 (-0.78%) [0]. The prices on that day were in the lower-middle range of the 52-week interval (WTI’s 52-week high ~$80.77, low ~$54.98; Brent’s 52-week high ~$82.63, low ~$58.39) [0].
• Crude Oil-Related ETF (USO): From 2025-01-02 to 2025-12-31 (full year 2025), USO fell from $76.84 to $69.16, with a daily standard deviation of volatility of approximately 1.93% during the period; the 50-day and 200-day moving averages were approximately $70.46 and $71.96, respectively, indicating a combination of a downward trend and fluctuations throughout the year [0].
• Energy Sector ETFs and Individual Stocks (Close on 2026-01-01):
  • XLE (Energy Select SPDR): ~$44.71 (-0.54%) [0]
  • XOP (Oil & Gas Exploration & Production SPDR): ~$126.26 (-0.92%) [0]
  • XOM: ~$120.34 (-0.54%) [0]
  • CVX: ~$152.41 (+0.07%) [0]
  • COP: ~$93.61 (-0.52%) [0]
    All the above assets showed minor fluctuations in closing gains/losses, with no signs of significant panic selling or a sudden surge in risk premium.

4. Potential Impact Assessment (Scenario and Risk Framework, No Directional Judgment)

• Supply Disruption Scenarios and Oil Prices:
  • If the situation escalates leading to a significant interruption of Iran’s crude oil exports, referring to the IEA’s indicated export loading of approximately 1.9 million barrels/day, it will create marginal pressure on the global balance. However, against the backdrop of OPEC+ having a large amount of spare capacity and non-U.S. supply growth, the sustainability of extreme scenarios needs to be comprehensively assessed in combination with OPEC+ policy responses and demand-side dynamics [4][6].
  • If geopolitical tensions further rise (e.g., restricted shipping in the Strait of Hormuz), historical data shows that short-term oil prices may face upside risks (data records indicate an increase of about 12% during the 2025 Israel-Iran conflict) [7][9]. However, the overall performance that year was a “significant narrowing of geopolitical premium”, mainly due to increased supply and weakening demand offsetting part of the risk premium [6][9].
• Risk Premium and Volatility:
  • Recent crude oil futures prices and volatility have not shown abnormal jumps; combined with market comments that “risk premium is already at a low level”, this indicates that the immediate pricing of this event by the short-term trading layer is limited [6][9]. This does not mean that potential risks have disappeared, but reflects the current market structure and expectations (including strong U.S. supply, non-OPEC growth, and OPEC+ policy adjustment space) [4][6].
• Potential Impact on Oil Investments (Scenario Framework, Not Investment Advice):
  • If tensions escalate: Oil prices and volatility may rise, and upstream high-beta targets (e.g., exploration and production) may perform more actively; energy stock valuations will become more sensitive to oil prices.
  • If the situation eases and supply is abundant: Oil prices will be under pressure, downstream and integrated enterprises will benefit from cost improvements, and sector performance will depend more on fundamentals of profitability and capital allocation.
  • Sanctions and Policy Variables: The path and intensity of sanctions (if any) will directly affect Iran’s oil exports and market pricing; currently, public information does not provide a clear timetable or scale for the resumption of sanctions [4][6][9].

5. Key Uncertainties and Tracking Points

• Situation Development: The scale and duration of protests, interaction path with the government, and whether they affect oil infrastructure or export logistics.
• OPEC+ Policy: Whether to adjust quotas or use spare capacity to hedge risks when there are marginal changes in supply [4][6].
• Sanctions and Financial Environment: Changes in USD liquidity, financing constraints, and settlement channels will affect the feasibility of Iran’s oil exports and market absorption willingness [1][4].
• Macro Demand: Global growth and demand rhythm in major import regions such as China are systemically important for the direction of oil prices [4][6].

6. Summary (Based on Current Data and Facts)

• As of the current trading time point, tool data shows that WTI and Brent prices and volatility are relatively stable, and related ETFs and energy stocks also show minor fluctuations; no explicit manifestation of extreme risk premium has appeared yet [0].
• Iran’s oil production of approximately 3.5 million barrels/day and export loading of approximately 1.9 million barrels/day have marginal importance in global supply. However, there is high uncertainty about whether supply can truly be interrupted, as well as the duration and scope of interruption.
• The current market environment of “low risk premium” and “relatively loose supply” may reduce the magnitude of immediate pricing of the event in the short term [6][9]. However, this does not mean that risks have disappeared; once there are restrictions on shipping in the Strait of Hormuz or increased sanctions, upside risks cannot be ignored [7][9].
• The potential impact on oil investments needs to be distinguished by scenario: In the scenario of escalating tensions, upstream high-beta targets and volatility strategies are more worthy of attention; in the scenario of easing tensions, profit quality and capital returns are more critical.

References
[0] Jinling API Data (Real-time quotes and daily line data, covering WTI, Brent, USO, XLE, XOP, XOM, CVX, COP)
[1] Guancha.cn - Iran’s New Internal Troubles at the End of the Year: Currency Collapse, Largest Protests in Three Years… (2025-12-31)
https://www.guancha.cn/internation/2025_12_31_802316.shtml
[3] Securities Times Network - Iran, Breaking News! Collapse, Out of Control! What Happened? (2025-12-31)
https://www.stcn.com/article/detail/3565229.html
[5] Wikipedia - 2025–2026 Iranian Protests (Overview of currency, inflation, etc.)
https://en.wikipedia.org/wiki/2025–2026_Iranian_protests
[4] IEA - Oil Market Report December 2025 (Iran’s oil production of approximately 3.5 million barrels/day, export loading of approximately 1.9 million barrels/day, and impact of Chinese independent refinery quota exhaustion)
https://www.iea.org/reports/oil-market-report-december-2025
[6] S&P Global Commodity Insights - Oil traders see prices falling as geopolitical ‘risk premium’ dissipates (Low risk premium, market repricing of supply shocks)
https://www.spglobal.com/energy/en/news-research/latest-news/crude-oil/101425-oil-traders-see-prices-falling-as-geopolitical-risk-premium-dissipates
[9] Reuters - Oil’s geopolitical premium vanished in 2025 - and may not return (Narrowing of geopolitical premium in 2025, Israel-Iran conflict and Strait of Hormuz concerns did not lead to persistent high premium)
https://www.reuters.com/markets/commodities/oils-geopolitical-premium-vanished-2025-may-not-return-2025-12-22/
[7] Critical Threats - Iran Update, December 26, 2025 (Islamic Revolutionary Guard Corps’ ship seizure incident in the Strait of Hormuz)
https://www.criticalthreats.org/analysis/iran-update-december-26-2025
[10] OPEC+ Related Reports (Production policy and global demand outlook)
https://www.aa.com.tr/en/energy/oil/opec-crude-oil-production-up-33-000-barrels-per-day-in-october/52853
[8] LinkedIn/Reuters Column - Israel-Iran war highlights Mideast’s declining impact on oil prices (Limited oil price fluctuations during the Israel-Iran conflict, reflecting the evolution of the Middle East’s influence on oil prices)
https://www.linkedin.com/posts/ron-bousso-85769a1_israel-iran-war-highlights-mideasts-declining-activity-7343542966415745025-Jgdw
[11] Wikipedia - 2025–2026 Iranian Protests (Inflation data, etc.)
https://en.wikipedia.org/wiki/2025–2026_Iranian_protests