Venezuela's public finances could be greatly benefited by the crisis in Iran

The blockade of the Strait of Hormuz and the subsequent surge in oil prices, following the military conflict between the United States, Israel, and Iran that began on February 28, have created an unexpectedly favorable situation for Venezuela's public finances. Economists estimate that the country's total income—both oil and non-oil—could be between 25 billion and 37 billion dollars in 2026, which would represent up to three times the recent levels, according to reports from La Nación and El País.

The conflict erupted when Iran blocked the Strait of Hormuz after attacks by the United States and Israel on energy infrastructure in the Persian Gulf. Approximately 20% of the world's oil, equivalent to about 16.7 million barrels per day, passes through this strait. On Monday, March 2, the price of Brent crude rose by 7%, its largest increase in nine months, with projections reaching 100 dollars or more if the blockade continues.

Goldman Sachs estimates a risk premium of between 14 and 15 dollars per barrel, while Lombard Odier predicts prices ranging from 120 to 150 dollars in the event of a complete closure of the strait.

For Venezuela, which produces about 1.2 million barrels per day, the impact is direct and significant. According to economist Alejandro Grisanti from Ecoanalítica, for every additional dollar in the average crude oil price in 2026, Venezuela would receive about 400 million dollars extra. Economist Hermes Pérez estimates that figure to be around 350 million for each additional dollar.

If the recent price increase continues, Venezuela could add about 2.4 billion dollars just from the price effect.

The pre-conflict projections estimated Venezuelan oil revenues between 10 billion and 20 billion dollars for 2026. That scenario changed radically in just a few days. "We are talking about public finances that could be between 35 billion and 37 billion dollars from both oil and non-oil revenues. This implies that the country's fiscal revenues could triple this year," the consulted analysts point out.