M. Juan Szabo [1] y Luis A. Pacheco [2]
Published Originally in Spanish in LA GRAN ALDEA
Just three days after the start of the US-Israeli attack on Iran, the Tehran regime resorted to its most powerful geopolitical weapon: “The Strait (of Hormuz) is closed. If anyone tries to pass, the heroes of the Revolutionary Guard and the regular navy will set those ships on fire,” said Ebrahim Jabari, senior advisor to the commander-in-chief of the Guard, in comments released this past Monday.
The Strait of Hormuz, for decades one of the most sensitive points in the global hydrocarbon trade, has finally materialized its ever-present threat and become the Achilles' heel of the energy world. During the week, only a fraction of the usual traffic passed through the strait, reducing global oil and liquefied natural gas (LNG) supplies, especially to Asia. The tight supply has driven prices to levels not seen since Russia's invasion of Ukraine in 2022. The $ 100-per-barrel mark was surpassed over the weekend, triggering alarm bells across all markets.
The Trump administration appears to have been caught off guard by these events and has had to temporarily suspend sanctions on Russian crude, allowing India to purchase Russian oil and conveniently store it in the waters of the Gulf of Oman. Similarly, Europe purchased Russian natural gas to combat rising prices.
After more than a week of intensive US and Israeli bombing targeting Iran's military capabilities, there are signs that Iran's missile and drone arsenal may be shrinking. Some sources estimate that Iran's launch capacity has decreased by 75%. In recent days, the number of attacks using these weapons has fallen by approximately 90% compared to the early days of the conflict, which could explain Hezbollah's increased military capacity by launching missiles against Israeli targets from Lebanon.
However, attacks on Arab countries have intensified, although this strategy, far from threatening those countries, has promoted cooperation between the United States, Israel, Saudi Arabia, Kuwait, the United Arab Emirates, Bahrain, and Qatar. Some of these states have begun planning retaliatory measures; for example, the United Arab Emirates announced the possible freezing of Iranian funds in its financial system. Faced with this situation, Iranian President Masoud Pezeshkian apologized to the affected neighboring countries and assured them that no new offensives would be launched against them, a message that failed to gain internal support within the regime, and the attacks continue.
To date, the effects of the conflict have elicited divergent interpretations. On the one hand, some analysts point out that the process of controlling Iran has proven more complex than anticipated by the US leadership, indicating an underestimation of Iranian military capabilities and a lack of strategic clarity regarding the stated objectives; in particular, the impact on energy prices does not appear to have been on Washington's radar. This perspective holds that the US faces an unpredictable and difficult situation to manage in negotiations, despite President Trump's demand for "unconditional surrender."
On the other hand, another group of analysts argues that the US process is part of a global strategy that, despite temporary challenges, aims to reshape the geopolitics of the Middle East, particularly by strengthening the Abraham Accords by including more Arab countries. Under this approach, a weakened and isolated Iran would be unable to finance extremist movements in the Middle East or other regions, leading to greater peace in the region.
On Monday, Ali Khamenei's son, Mojtaba, was named as the next supreme leader. US President Donald Trump had previously stated that Mojtaba would be an "unacceptable" choice, and Israel vowed to eliminate any successor. However, the path toward a cessation of hostilities remains unclear.
“Petropolitical” Foundations
We find ourselves at one of those moments when the fundamentals and geopolitics of hydrocarbons are difficult to separate, like Siamese twins. The inseparable point of connection, at least temporarily, is the Strait of Hormuz. In this 33-km-wide waterway, to reduce the risk of collision, ships follow a traffic separation scheme. Incoming ships use one lane and outgoing ships use another. Both have sufficient draft to allow the passage of loaded VLCCs (Very Large Crude Carriers); each lane is two miles wide, and they are separated by a two-mile-wide median. Approximately 20% of the oil (35% of globally traded crude) and 30% of the LNG exported daily from the region pass through the strait.
To avoid the Strait of Hormuz, the alternatives are limited and partial, consisting of a few pipelines built specifically to mitigate the risk of blockage. These pipelines are:
· The East-West Petroline pipeline connects the Abqaiq oil hub, near the Persian Gulf, with the port of Yanbu on the Red Sea in Saudi Arabia. It has a capacity of 5 million barrels per day (MMbpd), limited to 4.4 MMBPD by the port of Yanbu's dispatch capacity.
· The Habshan-Fujairah pipeline in the UAE links the Habshan oil fields (Abu Dhabi) to the Fujairah export terminal, located on the Gulf of Oman, outside the Strait of Hormuz. The pipeline's maximum capacity is 1.8 million barrels per day (MMbpd), but its normal utilization rate is only 80%, so it does not provide significant volumes in an emergency.
· The Goreh-Jask pipeline in Iran connects the Goreh terminal to the port of Jask, located east of the strait. Designed to move 1.5 million barrels per day (MMbpd), it currently has a limited capacity of 300 MMbpd.
· The SUMED (Suez-Mediterranean) pipeline in Egypt does not alleviate the flow of crude oil from the Persian Gulf; it complements the volume that can be transported through the Suez Canal from the Red Sea to the Mediterranean, supporting the flow that leaves via the Saudi Arabian route.
Iraq, Kuwait, Qatar, and Bahrain lack operational alternative infrastructure to bypass the Strait and rely entirely on canal navigation. However, analysts warn that these routes could only absorb a fraction of the total flow, leaving approximately two-thirds of Gulf exports blocked in the event of a complete closure. Iran, Kuwait, and Qatar have already begun limiting their production.
On the other hand, OPEC+ has no options to increase its production, given that the countries that, in theory, could do so are caught up in the Hormuz problem.
The rest of the world has very limited possibilities to mitigate the temporary deficit.
· Canada is trying to increase production and ship it through its new pipeline to the Pacific, allocating shipments to the Far East.
· The US temporarily licensed the sale of Russian crude oil in floating inventory to India, and several VLCCs have already left the Gulf of Oman bound for India.
· In the US, the use of drilling rigs has increased by 4 units, and fracking crews by 7, but it is a limited effort, and its results will be felt only after the emergency passes, if it lasts long.
· The US government is taking steps to restore transit through the strait by offering political risk insurance for oil tankers transiting the Gulf. Still, the measure has not had the expected response.
· The G7 countries are considering using their strategic reserves to mitigate rising prices, and most have expressed their support for this idea. However, without a clear understanding of how long the conflict will last, this may only be a short-term, palliative measure.
The Strait of Hormuz has been largely closed in recent days, cutting off access to a fifth of the world's oil and LNG supply. However, it has emerged that China, which obtains much of its crude oil and gas from Iran, is in talks with Iran to ensure the safe passage of crude oil and liquefied natural gas tankers through the strait. In fact, some of the tankers that were able to pass through the strait were confirmed to be bound for China. This development seemed to indicate that targeted supply disruptions will also be a piece in the new geopolitical chessboard.
It is not unreasonable to say that one of the biggest beneficiaries of the events in the Middle East is Vladimir Putin's Russia, which will reap higher energy prices in an environment where sanctions will be circumvented to avoid a collapse of the global supply of both oil and gas.
Events of Interest
· Qatar declared force majeure on gas exports amid the war, and sources said it could take at least a month to return to normal production levels. Qatar supplies 20% of the world's liquefied natural gas.
· Europe seems to have learned nothing from its history. Solar and wind power account for less than 15% of total energy consumption. Fossil fuels supply the remaining 85%. Yet Europe has acted as if the end of fossil fuels were imminent. Hydrocarbon fields in the British sector of the North Sea are being shut down prematurely; the Netherlands has closed gas fields that were still productive; and the EU has virtually abandoned shale gas development, despite the existence of regional shale deposits that could be fracked and commercially produced, opting instead to rely on imports.
· The United Arab Emirates, which has developed a diversification strategy by positioning itself as a global financial hub and a haven for large and new companies, is beginning to suffer damage to its image as a result of Iranian attacks.
· Side effects of the Russia-Ukraine war:
1) Hungarian oil company MOL and its Slovak subsidiary Slovnaft have filed a complaint with the EU competition watchdog against Croatian pipeline operator JANAF for refusing to allow the transit of Russian oil imports transported by sea. The Hungarian group has faced a disruption in the supply of Russian crude through the Druzhba pipeline, which runs through Ukraine, and has had to rely on the Adriatic pipeline from Croatia.
2) A Russian-flagged liquefied natural gas tanker, subject to US and UK sanctions, caught fire in the Mediterranean early Tuesday morning following a suspected explosion. The vessel, identified as the Arctic Metagaz, was destroyed around 4:00 a.m. local time between Malta and Libya. Several sources cited by the Times of Malta reported a series of explosions before the crew was rescued. The security firm EOS Risk Group indicated that the vessel may have been attacked by drones while sailing east. The tanker had deactivated its AIS tracker 300 km before the incident, allegedly following a so-called “gray route” to evade sanctions.
Crude Oil Prices
The oil situation in the Middle East in early March 2026 is critical, marked by a severe storage crisis and the blocking of export routes following the conflict with Iran.
When a US president declares there will be no deal with Iran short of "unconditional surrender," oil markets surge. Therefore, it should come as no surprise that this week the price of Brent crude surpassed $92/BBL for the first time since Russia's invasion of Ukraine in 2022.
Fears of overproduction and low prices have been temporarily forgotten, and concern has shifted towards the effects that high prices caused by shortages and the potential geopolitical risks collateral to this regional war may generate, as well as towards another wave of generalized inflation that materially affects the world economy.
Thus, at the time of writing, Monday, March 9, 2026, Brent and WTI crude oil benchmarks were trading at $101.6/bbl and $99.50/bbl, respectively, reflecting an increase of approximately 18% compared to the previous week's close, having been at much higher levels over the weekend. This variable, perhaps more than the military effectiveness of the participants, will determine the course of the conflict. It was reported this Monday, March 9, that the Strait of Hormuz was beginning to clear.
Natural gas prices reflected the Persian Gulf crisis more significantly. Europe saw increases of 50-70%, while Asia experienced increases of 20-45%.
VENEZUELA
“(…) everything changes” so that “(…) everything stays the same.” The Leopard
The Trump Administration's priority in Venezuela is to revive the Venezuelan economy and markets. The visits of high-level representatives from the CIA, Southern Command, the Department of Energy, and, more recently, the Department of the Interior—the latter leading groups of investors and companies interested in Venezuela—and received with great fanfare by the regime headed by Delcy Rodríguez, are evidence of this superficial adjustment.
To this, we can add the licenses granted by OFAC in response to a rapidly approved Organic Hydrocarbons Law, as well as the restructuring of oil exports at prices significantly higher than in previous years and supposedly protected against creditors and the Chavista regime's habitual wastefulness. The resumption of direct flights between the two countries is also a sign in that direction.
The week was filled with visits, meetings, the signing of agreements, and the granting of new licenses. U.S. Secretary of the Interior Doug Burgum paid an official visit to Venezuela from March 4 to 6, 2026. This visit marked a turning point in bilateral relations, with a focus on energy and mining cooperation under the Trump administration. Burgum was received by interim president Delcy Rodríguez to assess and promote a "legitimate" mining sector and explore legal avenues for U.S. companies to resume operations in the country. Also present at the meetings were oil executives, the Venezuelan Interior Minister, Diosdado Cabello, and the newly minted Vice President for Economic Affairs, Calixto Ortega Sánchez.
Several investment projects in the mining and energy sectors were discussed, including negotiations for a multi-million-dollar gold deal between Minerven (which received an OFAC license) and Trafigura, as well as potential agreements on other minerals. Additionally, senior executives from the British oil company Shell plc visited Miraflores and met with officials from the Ministry of Petroleum and PDVSA. The topics discussed and agreements signed relate to the development of the Dragon field in northern Paria and the sale and delivery of natural gas from that field to Trinidad. They also signed a technical agreement on oil and gas production in the Punta de Mata area.
The next step in the development of these events was confirmation that the United States and Venezuela have formally agreed to resume diplomatic and consular relations effective March 6, 2026. This restoration follows a significant political change in Venezuela, stemming from the arrest of Nicolás Maduro in January 2026 and the formation of a transitional government headed by interim president Delcy Rodríguez.
The official declaration ends a seven-year period of rupture that began in 2019. Beyond the usual functions of embassies and consulates, the consequences of this announcement raise important questions given Venezuela's unique legal situation. Since 2019, the U.S. government has not recognized either the Maduro regime or the interim government headed by Delcy Rodríguez. As is well known, this lack of legitimacy for Maduro led the National Assembly in 2015 to appoint an interim president, Juan Guaidó, and subsequently to create a sort of interim government that held the representation of Venezuela in the United States and other jurisdictions; later, the 2015 National Assembly assumed that representation, a role it has held until now.
This framework enabled the implementation of various legal, administrative, and financial measures to protect Venezuelan assets abroad. These actions included the appointment of an Ad Hoc Board of Directors for PDVSA, the Central Bank of Venezuela (BCV), and other entities, which, in turn, appointed, for example, directors of the companies holding shares in CITGO, the most valuable Venezuelan company outside of Venezuela. The CITGO case is of particular interest, as this company was financially and operationally recovered and defended against creditor claims, with the legal backing of the United States government.
The recognition of the Venezuelan government thus creates a dual complexity regarding who now represents Venezuela's interests and who is responsible for continuing to confront the threats that still loom as a consequence of the irresponsible debt incurred by the Chavista regimes. This ambiguity can only be resolved by the U.S. government, when and if it takes the necessary legal action on this matter; according to the expert lawyer José Ignacio Hernández, political declarations alone are insufficient to illuminate the path forward. Hernández also reminds us that, more than assets, what the regime in Venezuela will have to face is the management of a colossal liability of its own making.
On the economic front, although transfers of funds protected and controlled by the US are flowing normally, the auctions continue to be disrupted, affecting the level of control the Central Bank of Venezuela (BCV) has over the foreign exchange market. Foreign currency was again offered close to its market value. The gap between the official and market rates remained above 40%. The official rate closed at 433 Bs./$, a 3% devaluation for the week.
Public spending shows an upward trend and, with the increase in international crude oil prices, its financing will be facilitated.
Meanwhile, gold prices have reached record levels globally, contributing to the revaluation of some international reserves. Prices for the Venezuelan oil basket have risen in tandem with increases in international prices, reaching nearly $60/BBL this week, allowing oil revenues to reach their highest levels since the licensing phase began (November 2022).
The BCV has been busy putting its house in order; as the first evidence of this process, it published for the first time in a long time information on inflation: an annual inflation rate of 618%.
Oil Operations
Crude oil production remained relatively stable over the past week, while refining output increased due to the greater availability of local crude.
Representatives from the Spanish company Repsol were in the La Ceiba and Tomoporo fields, southeast of Lake Maracaibo, planning their activities there. The Maurel et Prom Maritime 42 drilling rig, already in the Urdaneta Oeste block, will begin operations by repairing existing wells before drilling new ones.
Weekly production was 885 Mbpd, geographically distributed as follows:
· West 245 Chevron:102
· East 111
· Orinoco Belt 529 Chevron:140
TOTAL 885 Chevron: 242
Domestic refineries processed 251,000 barrels per day (251 Mbpd) of crude oil and intermediate products, yielding 81,000 bpd of gasoline and 73,000 bpd of diesel. This increase is the net result of the startup of an additional distillation tower in Paraguaná and the difficulties in maintaining operations at El Palito.
Regarding exports, there are still floating inventories and inventories in various tank yards in the Caribbean, which should enter the sales stream during March and April.
Based on the export plan and the estimated prices for the Venezuelan basket, March revenues could exceed $1.3 billion.
[1]: International Analyst
[2]: Nonresident Fellow Baker Institute
