Iran is not a major oil producer, but it still moves prices. Here's why

Markets

Iran is not a major oil producer, but it still moves prices. Here's why

Published Fri, Jan 23 2026

12:34 PM EST

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Pippa Stevens @PippaStevens13 WATCH LIVE

Key Points

Oil prices hit multi-month highs last week as a new wave of civil unrest in Iran raised concerns about supply disruptions.
"They were going to hang 837 people," President Donald Trump said in an interview with CNBC on Wednesday. "And I told them, you can't do that. If you do that, it's going to be bad."
"If we were to get a confrontation between the U.S. and Iran that led to the loss of Iranian oil exports, there just isn't a lot left in the OPEC tank to cover that," Helima Croft, global head of commodity strategy at RBC Capital Markets, told CNBC.

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Why Iran spooked oil markets

Markets

Oil prices rose Friday as President Donald Trump's renewed threats against Iran raise concerns about supply disruptions.

Iran is not a major oil producer. The country pumps about 3.4 million barrels per day, according to Kpler. That number pales in comparison with the U.S. and Saudi Arabia, which pump about 13.5 million barrels per day and 9.5 million barrels per day, respectively, according to data from the U.S. Energy Information Administration and OPEC.

Yet a recent wave of protests in Iran spurred by the plummet in the nation's rial currency and Trump's subsequent suggestions that the U.S. could take military action in the country have rocked energy markets.

"Oil markets are moving on fear," Helima Croft, global head of commodity strategy at RBC Capital Markets, told CNBC. "It's basically a concern about disruption."

Market anxiety grew Friday as tensions between Iran and the U.S. escalated.

"We're watching Iran," Trump told reporters Thursday. "You know we have a lot of ships going in that direction just in case. We have a big flotilla going in that direction and we'll see what happens."

Trump's comments come as more than 5,000 people have died in Iran since the protests began on Dec. 28, according to the Human Rights Activists News Agency.Â

"They were going to hang 837 people," Trump said in an interview with CNBC on Wednesday. "And I told them, you can't do that. If you do that, it's going to be bad."

While the market is well supplied for the time being, OPEC and its allies, which pump about 40% of the world's oil, hiked their output last year, cutting into spare capacity.

"If we were to get a confrontation between the U.S. and Iran that led to the loss of Iranian oil exports, there just isn't a lot left in the OPEC tank to cover that," Croft said.

Concerns around a larger regional conflict have also lifted prices given Iran's proximity to some of the world's largest oil producers -- namely Saudi Arabia.

"Iran's location is strategically very important when we think about critical waterways like the Strait of Hormuz, which is a major chokepoint for oil, and we have seen Iran and Iranian-backed groups before target tankers and target critical infrastructure in the Gulf," said Croft.

In 2019, Iran launched a series of attacks on oil tankers in the Strait of Hormuz. About 20% of global crude flows through the narrow waterway, according to the EIA.

Despite pulling back threats of military intervention, Trump confirmed to CNBC on Wednesday that 25% tariffs on countries doing business with Iran are "going forward."

Existing sanctions on Iran have already hampered the country's crude exports, with the vast majority going to independent Chinese refiners that buy the oil at a discount to benchmark prices.

"Can you really squeeze Iran much more given where their barrels are going?" said Croft. "[Have] sanctions now lost [the] ability to kind of move the needle when it comes to Iranian policy?"

Watch the video above to learn more about Iran's impact on oil markets and what it could mean for consumers.