Global Conflict Under the Spotlight: The Week in O&G

The closure of the Strait of Hormuz following the US-Israel military campaign against Iran has removed approximately 20MMb/d from global oil supply, creating a physical shortage that strategic reserve releases and rerouting measures can only partially offset. For Mexico, elevated crude prices deliver a short-term fiscal boost to PEMEX and federal revenues, but the crisis simultaneously raises natural gas import costs, inflates maritime freight rates, and increases input costs for export-oriented manufacturing sectors including automotive, electronics, and petrochemicals. The disruption represents the most significant external stress test of Mexico's energy sovereignty agenda since 2020, with the government's oil hedge position becoming a critical variable in determining net fiscal impact.

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Global Oil Crisis Is a Physical Supply Emergency: Sparta

Sparta's analysts have attempted to quantify exactly how much of that gap can realistically be plugged through emergency measures. Iranian exports that continue flowing account for roughly 2MMb/d, potential strategic petroleum reserve releases could contribute up to 5MMb/d, Saudi Arabia's Yanbu pipeline diversion via the Red Sea adds approximately 2MMb/d, and inventory draws contribute around 1MMb/d. Combined, these measures address perhaps 10MMb/d of the shortfall. "We have basically solved half of the problem," the analysts said. "We are still left with about 10MMb/d."

Global Oil Prices Peaked to US$119.50/b Amid Middle East Conflict

Crude oil prices rose sharply as conflict in the Middle East impacted production and disrupted shipping routes. Brent crude reached an early peak of US$119.50/b before trading at approximately US$101/b, marking a 9% increase. 

West Texas Intermediate (WTI) followed a similar trajectory, soaring above US$119.48/b before retracting toward the US$100/b level. The surge coincides with the appointment of Ayatollah Mojtaba Khamenei as Iran’s new leader, signaling a continuation of the conflict despite sustained bombardment by US and Israeli forces.

The war has significantly impeded energy logistics in the Persian Gulf, particularly through the Strait of Hormuz. According to Rystad Energy, approximately 15MMb of oil, representing 20% of global supply, typically passes through this strait daily. Military threats have halted tanker traffic from major exporters, including Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, and UAE.

Sempra Infrastructure Cancels Vista Pacífico LNG Project

One of Mexico's most closely watched natural gas export projects is officially suspended. Sempra Infrastructure has canceled the Vista Pacífico LNG project, a mid-scale liquefied natural gas liquefaction terminal that would have been built near the port of Topolobampo, Sinaloa, in partnership with CFE. The decision, disclosed in Sempra's annual 10-K report filed with the US Securities and Exchange Commission on Feb. 26, 2026, brings to a close a four-year development effort that had positioned Topolobampo as a potential gateway for re-exporting US natural gas to Asian and Pacific markets.

"Due to a change in the priorities of SI Partners and CFE, in December 2025 we agreed to rescind the existing development agreement," the company stated in the filing. Behind the project lies a story involving regulatory setbacks, community opposition, environmental concerns, and a sweeping corporate restructuring that has gradually shifted Sempra's strategic center of gravity back toward the United States.