BRICS oil markets are under serious pressure right now. The Iran crisis has pushed global oil prices to a 19.5-month high after the Strait of Hormuz — the passage that handles roughly a fifth of the world’s oil — closed following the US-Israeli military offensive against Iran. On March 5, April WTI crude closed up $6.35, or 8.51%, and gasoline also hit a 1.75-year high. BRICS oil trade runs through some of the most contested energy corridors on the planet, and at this point, the bloc’s energy security and its de-dollarization agenda are being tested at the same time.

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The strait closure left Gulf oil with basically nowhere to go. Iraq and Saudi Arabia started cutting production as storage at key terminals filled up faster than expected — Kayrros reported Wednesday that four of Saudi Arabia’s Ras Tanura refinery tanks were already full, and the Ju’aymah terminal on the country’s east coast is also running out of spare capacity. The Iran crisis is, right now, directly blocking BRICS oil flows out of some of the most critical export routes in the world.

Iran’s Islamic Revolutionary Guard Corps warned ships that vessels were

“could be at risk from missiles or rogue drones.”

Goldman Sachs put the real-time risk premium for crude at $18 per barrel — its estimate of what a six-week full halt to tanker traffic through the strait actually costs the market. An Iranian drone also caused a major fire at the UAE’s Fujairah oil hub on Tuesday, and separate drone attacks forced Saudi Arabia to shut down its Ras Tanura refinery, which processes 550,000 barrels per day.

Beijing told its largest refiner on Thursday to suspend exports of diesel and gasoline, citing the Persian Gulf conflict. That move is pushing global oil prices even higher, and at the time of writing there is no signal from China that it is getting reversed. US Defense Secretary Pete Hegseth had this to say about the ongoing offensive:

“Death and destruction from the sky all day long.”

Israel has also indicated weeks more of conflict ahead.The Guardian reports that the US-Israeli offensive has killed over 1,000 civilians since it started, including scores of children. Iran is retaliating — hitting US military bases and civilian infrastructure across the region, including in Oman. The BRICS oil sector, which depends on stable Persian Gulf transit, has no immediate buffer for a conflict of this scale.

The Iran crisis has also landed directly on BRICS de-dollarization efforts, and the timing is bad. BRICS oil producers were already navigating US sanctions on Russian and Iranian crude, and this escalation adds another layer of risk.Wang Tao, former VP of ZTE and a regular voice on China’s strategic direction, had this to sayin a recent Think BRICS interview:

Source: Watcher Guru