The Strait of Hormuz Crisis: A Global Energy Shockwave
The conflict involving the U.S., Israel, and Iran continues to send ripples through the Middle East and beyond, particularly impacting the global energy market. Ten days after the initial attacks, the repercussions are being felt worldwide, with the effective closure of the Strait of Hormuz at the center of the crisis.
The Blockade and Soaring Oil Prices
The blockade of the Strait of Hormuz, a critical artery for global oil trade, has paralyzed crude production in the region, causing prices to surge. On March 9, 2026, crude oil prices approached $120 per barrel. Amin Nasser, president of Saudi Aramco, warned that the longer the conflict persists, the more catastrophic the consequences will be for global oil markets and the global economy.
Impact on Latin America: The Case of Mexico
While geographically distant, the conflict’s effects are being felt in Latin America. Specifically, the question arises whether a petroleum-producing nation like Mexico could benefit. According to Miriam Grunstein, a partner at Brilliant Energy Consulting, the conflict will not affect the production of Mexico’s state-owned oil company, Pemex. “Production will not increase or decrease based on the war; we do not have the flexibility or capacity to increase or decrease it, as OPEC countries do for pricing reasons,” she stated.
Pemex Production and Government Subsidies
Pemex’s production and exports have reached “historic lows.” However, Oscar Ocampo, Director of Economic Development at the Mexican Institute for Competitiveness (IMCO), notes that Pemex benefits from the rising crude oil prices. The Mexican government currently has an agreement with gas station owners to prevent gasoline prices from exceeding 24 pesos per liter (approximately 1.2 euros per liter).
“If they want to maintain that commitment, they will have to subsidize fuels or reduce fuel taxes. And that can be costly,” Ocampo explained. He drew a parallel to the Russian invasion of Ukraine in February 2022, when Mexico received 395 billion pesos in excess oil revenues but spent 394 billion pesos on fuel subsidies, resulting in a net balance of nearly zero.
A Shifting Global Oil Market
Grunstein emphasizes that the increase in oil prices only benefits Mexico in the “short term.” “The oil market is being reconfigured, and Mexico is not on the map. Mexico is now included in a map of highly large, very competitive producers, and could be lost in the novel order of global oil markets.”
She suggests the U.S. May be attempting to hinder Iran to increase the competitiveness of Venezuelan oil, a strategy she deems “ridiculous” as Venezuelan production is unlikely to increase significantly in the near or medium term.
Fears of an Energy Crisis and Emergency Measures
The development of the global oil market and its effects on producing and exporting countries like Mexico will depend on the duration of the Middle East conflict. On Tuesday, March 10, 2026, oil prices stabilized somewhat following a post on X (formerly Twitter) by U.S. Energy Secretary Chris Wright, claiming the U.S. Navy had escorted a tanker through the Strait of Hormuz. However, Wright subsequently deleted the post, which was also refuted by the White House.
Ten days into the war, both the European Commission and the International Energy Agency are considering activating temporary emergency measures, such as tapping into strategic petroleum reserves, to avert a price crisis similar to the one experienced in 2022 following the Russian invasion of Ukraine.
FAQ
Q: What percentage of the world’s oil passes through the Strait of Hormuz?
A: More than 20 percent of the world’s oil travels through the Strait of Hormuz.
Q: Is Mexico’s oil production increasing?
A: No, Pemex’s production and exports have reached historic lows.
Q: What is the Mexican government doing to control gasoline prices?
A: The government is subsidizing fuels to prevent gasoline prices from exceeding 24 pesos per liter.
Q: What is the potential impact of the conflict on global oil reserves?
A: The European Commission and the International Energy Agency are considering releasing strategic petroleum reserves to mitigate potential price increases.
Did you know? The 2026 Strait of Hormuz crisis is causing significant disruption to global energy trade, with potential long-term consequences for economies worldwide.
Pro Tip: Keep a close watch on geopolitical developments in the Middle East, as they can have a direct impact on energy prices and your financial portfolio.
Stay informed about the evolving situation in the Middle East and its impact on the global energy market. Explore our other articles on energy policy and geopolitical risk for further insights.
