Brazil seizes Japan's crude oil gap, Hormuz supply disruption triggers global energy reshuffling, risk aversion dominates the market

⑴ Affected by the closure of the Strait of Hormuz due to conflicts between Iran, the United States, and Israel, the Brazilian Ministry of Foreign Affairs is coordinating the sale of crude oil to Japan. Brazilian Foreign Minister Vieira, accompanied by executives from the National Petroleum Company, traveled to Tokyo to advance negotiations, holding a meeting with Japanese Ministry of Economy, Trade and Industry Director Akagawa Yoshimasa on May 18. The Japanese side stated, "Brazil is ready to have a constructive dialogue regarding Japan's purchase of Brazilian crude oil."⑵ Japan relies on Middle Eastern oil for up to 96% of its supply, with 90% of imported crude oil passing through the Strait of Hormuz. After the closure of the strait, Japan's crude oil imports in April dropped sharply by about 61% compared to March, and about 66% year-on-year, with Middle Eastern procurement plummeting 68% year-on-year. Japanese Prime Minister Sanae Takaichi announced the release of the national reserves in March, but gasoline prices still hit historic highs. Tokyo had to implement emergency subsidies for diesel, heavy oil, kerosene, and gasoline.⑶ Globally, the closure of the Strait of Hormuz has driven up the prices of crude oil and liquefied natural gas, with Asian economies bearing the most pressure as they are the main destinations along this route. Meanwhile, Brazil had already engaged in crude oil negotiations with the foreign ministers of India and Korea in March, indicating that global energy trade is rapidly shifting from reliance on a single strategic passage to a diversified supply system, with market trading logic moving from prioritizing efficiency to prioritizing supply security.