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View all search resultsWhy we should care about Iranian and Venezuelan oil
In the world of oil, massive reserves mean nothing if a refinery can't digest the barrel. For Indonesia, the choice between Iranian and Venezuelan crude isn't a matter of geopolitics—it’s a test of technical compatibility and bottom-line survival.
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An oil refinery is seen on July 9, 2024, behind a mosque in Balikpapan, East Kalimantan. (AFP/Yasuyoshi Chiba)
I
magine an Indonesian refiner, trader or policymaker facing two tempting offers on the global market: one barrel from Iran, and one from Venezuela. Both come from sanctioned countries; both are sold at attractive discounts; and both carry heavy geopolitical baggage.
But for Indonesia, the real question is not which barrel is cheaper, it is which barrel our refineries can actually process efficiently, profitably and safely. This is where a distant geopolitical story becomes a local Indonesian reality.
On paper, Venezuela looks unbeatable. It holds the world’s largest proven oil reserves, totaling roughly 303 billion barrels. Iran holds less, around 209 billion barrels, though it remains among the largest producers globally.
Yet, oil markets do not reward reserves alone; they reward usability. In the oil industry, usability begins with the chemistry inside the barrel.
Iran Heavy is a medium-heavy sour crude. While it isn't "easy" oil, it is commercially familiar. Many refineries across Asia were specifically designed to process this grade of Middle Eastern crude, as it fits existing configurations for sulfur handling, shipping routes and product optimization.
Venezuela’s Merey, by contrast, is significantly heavier, denser and more viscous. This is not a simple refinery feedstock. It is a specialized crude that demands higher conversion capacity, more sophisticated blending, and a greater tolerance for heavy fractions and metallic impurities.
In simple terms, Iranian crude is difficult but manageable; Venezuelan crude can be highly profitable, but only in the right hands.
