Whenever there's instability in oil-producing countries, it can have economic reverberations around the world.

Iran, which is in the midst of antigovernment demonstrations, remains one of the world's most important oil producers.

That's because its production capacity can fluctuate wildly, depending on geopolitical circumstances. And that can have a significant impact on the world price.

According to the OPEC website, Iran had proven crude oil reserves of 157.2 billion barrels in 2016.

OPEC's most recent monthly report shows that Iran produced 3.8 million barrels per day of crude oil in November.

This ranked third in the cartel behind Saudi Arabia (10 million barrels per day) and Iraq (4.4 million barrels per day).

World oil production this year was around 96 million barrels per day.

This means that Iran accounts for about four percent of the world supply.

Iran was only producing 2.8 million barrels per day in 2015 and 3.5 million barrels per day in 2016, according to the OPEC report.

The removal of sanctions against Iran stimulated oil production in that country.

This came as a result of its nuclear deal with western industrialized countries, which has been repeatedly condemned by U.S. president Donald Trump.

Keep in mind that rising Iranian oil production isn't in the best economic interest of oil producers in other countries, including its arch rivals Saudi Arabia and the United States.

But today's production numbers in Iran are still well below the all-time peak of 6.7 million barrels per day achieved in November 1976 under the Shah of Iran.

So Iran has the potential to steadily increase production, which could affect world prices.

This has been a pretty good year for oil producers. West Texas intermediate crude rose 15 percent in 2017, reaching US$60 per barrel. Brent crude has crossed US$66 per barrel.

That's because the demand-supply dynamics changed in 2017, according to the Energy Information Agency.

More economic growth causes greater consumption of petroleum products.

Meanwhile, the Iranian Oil Terminals Company announced last summer that it had increased its crude-oil-loading capacity to 8 million barrels per day at its Kharg oil terminal.

Oilprice.com quoted the oil minister, Bijan Zanganeh, saying that by 2021, Iran planned to bring production to 4.7 million barrels per day.

Production increases in Iran have the potential to stabilize prices and halt the steady increases of 2017 from being repeated in future years.

This is not going to warm the heart of Russian president Vladimir Putin, who needs more cash to run his government, particularly in an election year.

In fact, the World Bank revealed that oil and gas revenues would account for 37.7 percent of total Russian government income in 2017.

Last February, Bloomberg reported that Russia had become the world's largest oil supplier at 10.49 million barrels per day.

Increasing Iranian oil production is also not the best news for other world oil producers.

But it will please Iran's largest customers, which include China, Japan, India, and South Korea. The latter three of those countries are close U.S. allies.

If the U.S. is playing any role in fomenting disturbances in Iran, it's not going to want to telegraph this to the world because it could anger these American friends. (In 2016, I suggested on this website that the appointment of Nikki Haley as the U.S. ambassador to the United Nations might be linked to the Trump administration's planning with regard to Iran.)

United States has a lot at stake

The United States has become a major player in the world oil industry in recent years.

The U.S. Energy Information Administration forecast last June that U.S. oil output was going to exceed 10 million barrels per day this year, shattering a record set in 1970.

It's due in part to the boom in fracking of oil locked in shale rock.

OPEC pegs U.S. production at 14.24 million barrels per day if this includes unconventional and conventional natural gas liquids, biofuels, and other liquids.

While the rankings of Russia, Saudi Arabia, and the United States might switch from time to time, these three countries are producing more than 30 percent of all the oil consumed in the world.

And America's largest oil company, ExxonMobil, has significant business operations in Saudi Arabia and Russia.

But ExxonMobil was mostly cut out of Iran as a result of U.S. sanctions. (There were reports that ExxonMobil still did some business there through a subsidiary, though the company denied that it had broken any U.S. law.)

So if a revolution in Iran sets back oil production in that country, you can see who's going to be happy about that development.

Meanwhile in November, Foreign Policy carried an article with a prescient headline: "Jared Kushner, Mohammed bin Salman, and Benjamin Netanyahu Are Up to Something". 

The subhead simply stated: "And it looks a lot like a plan to squeeze Iran."

"With this president, this crown prince, and the current prime minister of Israel, anything is possible," wrote the author, Dov Zakheim, a former official in the Reagan administration.

Zakheim's article focused on the usual Sunni-Shia rivalries in the Middle East; it didn't say anything about oil, which is what lubricates the economies of several countries in this region.

The reality, however, is that Trump's oil-industry supporters do not want to see jacked-up Iranian oil exports from Iran to China, Japan, India, and South Korea. This is particularly so for those who feel they could be meeting part of this Asian demand.

Rebellion in Iran is also going to delight Saudi Arabian deputy crown prince Mohammed bin Salman, a new friend of Trump's son-in-law, Kushner.

This past week, they may have all gotten their wish.