Accurate reservoir storage estimation is fundamental to sustainable water resources management; however, small dam projects are often hindered by the prohibitive costs and time required for high-precision topographic surveys. In this study, a rigorous validation of freely available one-arc-second SRTM DEMs was conducted as an alternative approach for estimating volume-elevation relationships at ten small dams in Iraq. High-precision surveys served as benchmarks, enabling statistical validation of DEM-derived estimates using absolute relative error (ARE), root mean square error (RMSE), mean absolute error, and the coefficient of determination (R²). Reservoir basin morphology was further characterised through planimetric indices, including area-to-volume ratio (AVR), shape factor, and solidity. In parallel, terrain complexity within a 5 km buffer zone was quantified using slope variability, curvature, vector ruggedness measure (VRM), and terrain ruggedness index (TRI). A strong structural agreement was demonstrated (R² > 0.98), although substantial variation in volumetric precision was observed. A global sensitivity analysis using the Morris Method identified the standard deviation of the Terrain Ruggedness Index (TRI) as the dominant predictor of accuracy, with µ* values of 83–86, while all other metrics showed minimal influence (µ* ≈ 0–24). These results establish a clear accuracy threshold for one-arc-second SRTM DEMs: they are sufficiently reliable for preliminary planning (< 20% error) in low-ruggedness terrain (TRI SD < 0.1) but become highly unreliable in rugged landscapes, where errors exceed 150% (TRI SD > 0.1). These findings provide a predictive framework for assessing DEM suitability, supporting the integration of satellite topography into small-scale reservoir planning.