- The Strait of Hormuz closure has pushed global oil prices to a 19.5-month high, severely disrupting BRICS oil flows.
- China has ordered its largest refiner to suspend diesel and gasoline exports, further tightening global supply.
- The crisis directly challenges the BRICS bloc’s energy security and its concurrent de-dollarization agenda.
- Goldman Sachs estimates a real-time risk premium of $18 per barrel for crude due to the strait’s closure.
A US-Israeli military offensive against Iran in early March 2026 triggered a crisis, closing the vital Strait of Hormuz and sending oil prices soaring. This strategic chokepoint handles roughly one-fifth of the world’s oil, and its blockage has immediately pressured BRICS energy markets. Consequently, April WTI crude closed up 8.51% on March 5, while gasoline hit a 1.75-year high.
The strait’s closure left Gulf oil with nowhere to go, forcing Iraq and Saudi Arabia to cut production as storage filled. “Could be at risk from missiles or rogue drones,” warned Iran’s Islamic Revolutionary Guard Corps to shipping vessels. Meanwhile, an Iranian drone caused a major fire at the UAE’s Fujairah oil hub, and separate attacks forced Saudi Arabia to shut its Ras Tanura refinery.
Beijing responded by telling its largest refiner to suspend exports of diesel and gasoline, citing the Persian Gulf conflict. This move is pushing global oil prices even higher with no reversal in sight. U.S. Defense Secretary Pete Hegseth described the ongoing offensive as “Death and destruction from the sky all day long.”
The Iran crisis has also landed directly on BRICS de-dollarization efforts, adding a layer of risk to oil producers already navigating U.S. sanctions. Wang Tao, former VP of ZTE, emphasized the need to decouple infrastructure from former hegemonic systems. He also stressed the importance of the BRICS Pay system and quickly decoupling from SWIFT.
However, the disruption is absorbing all extra supply, including an OPEC+ increase to 206,000 barrels per day in April. Vortexa data shows around 290 million barrels of Russian and Iranian crude in floating storage. BRICS oil trade currently has no clear path out of these contested corridors, simultaneously testing the bloc’s energy security and its financial independence agenda.
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