Breaking
IRAN WAR: STRAIT OF HORMUZ IMPACT
US & Israel launch joint military strikes · Iran retaliates across the Middle East
EIA · IEA · Vortexa · S&P Global Platts · Lloyd's · ONI · AP · Reuters · Al Jazeera
ASSESSMENT
Hormuz: 20M b/d at risk = 20% of global oil consumption + 27% of seaborne trade (EIA) /// OPEC+ spare capacity only ~3.5M b/d — cannot offset a full Hormuz closure (EIA 2024) /// Bypass capacity: only ~2.6M b/d available — 13% of Hormuz volume (S&P Platts) /// 84% of Hormuz crude destined for Asia · China/India/Japan/S.Korea = 69% (EIA 2024) /// Qatar's 106 MTPA LNG capacity transits Hormuz — 20% of global LNG at risk (IGU 2024) /// IEA coordinated SPR max drawdown: ~4.4M b/d vs 20M at risk — reserves buy weeks, not months (IEA) /// Iran stockpiles ~6,000 naval mines — full Hormuz clearance est. 4-8 weeks minimum (US Navy / ONI) /// /// /// /// Hormuz: 20M b/d at risk = 20% of global oil consumption + 27% of seaborne trade (EIA) /// OPEC+ spare capacity only ~3.5M b/d — cannot offset a full Hormuz closure (EIA 2024) /// Bypass capacity: only ~2.6M b/d available — 13% of Hormuz volume (S&P Platts) /// 84% of Hormuz crude destined for Asia · China/India/Japan/S.Korea = 69% (EIA 2024) /// Qatar's 106 MTPA LNG capacity transits Hormuz — 20% of global LNG at risk (IGU 2024) /// IEA coordinated SPR max drawdown: ~4.4M b/d vs 20M at risk — reserves buy weeks, not months (IEA) /// Iran stockpiles ~6,000 naval mines — full Hormuz clearance est. 4-8 weeks minimum (US Navy / ONI) /// /// ///
Daily Oil Transit — Hormuz
20 M b/d
≈ 20% of global petroleum consumption (EIA 2024)
≈ 27% of global seaborne oil trade (EIA 2024)
Live Commodity Prices
Brent (BZ=F)
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Hormuz Closure — Price Scenarios
Partial Disruption (1-2 weeks)
Brent $95–110 WTI $90–105
+25-45% · Harassment, not full blockade · Naval escorts, SPR release · Abqaiq 2019 analog ×3
Full Blockade (1-3 months)
Brent $120–155 WTI $115–150
+55-100% · Mining/interdiction of lanes · Kuwait 1990 analog · Demand destruction onset ~$130-150
Extended Regional War (3+ months)
Brent $150–200+ WTI $145–195+
+90-170% · Infrastructure destroyed · 1973 embargo analog · Rationing / recession
Futures Curve: Severe Backwardation
Near-term contracts at premium to deferred — market pricing physical shortage risk. Degree depends on closure duration: short disruption = $5-15 backwardation; full blockade = $20-40+ front-month premium over 12-month.
(Goldman Sachs / JP Morgan crisis models · EIA disruption scenarios)
Crude Origin — 2024 (EIA)
🇸🇦 Saudi Arabia5.5M b/d · 38%
🇮🇶 Iraq3.4M b/d · 23%
🇦🇪 UAE2.1M b/d · 14%
🇰🇼 Kuwait1.7M b/d · 12%
🇮🇷 Iran1.3M b/d · 9%
🇶🇦 Qatar (LNG)~20% global LNG
Crude Destination — 2024 (EIA)
84% ASIA
China27%
India16%
Japan14%
S. Korea12%
Other Asia15%
Rest of World16%
Global Exposure
20%
Global oil supply
27%
Seaborne trade
20%
Global LNG
2%
US consumption
OPEC+ Spare Production Capacity (EIA 2024)
~3.5 M b/d
Saudi Arabia ~2M · UAE ~1M · Others ~0.5M
Critical gap: Spare capacity covers only 17.5% of Hormuz flow. And most Gulf spare capacity normally ships through Hormuz — it needs bypass routes to reach market.
LNG Exposure — Hormuz (IGU 2024)
~20% of global LNG
Qatar: 106 MTPA — virtually all transits Hormuz
TTF (Europe gas)€28 → €80-120/MWh
JKM (Asia LNG)$12 → $35-55/MMBtu
Europe still rebuilding from 2022 gas crisis. Asian spot buyers (Bangladesh, Pakistan) priced out first. Japan/Korea face acute winter shortfalls.
Bypass Infrastructure
PipelineCap.Status
🇸🇦 Saudi E-W Pipeline
Abqaiq → Yanbu (Red Sea)
5M b/d
Active
🇦🇪 UAE Fujairah
Habshan → Fujairah (Gulf of Oman)
1.8M b/d
Limited
🇮🇷 Goreh-Jask
Goreh → Jask (Gulf of Oman)
300K b/d
Inactive
Available Bypass Capacity (EIA / S&P Platts)
~2.6M b/d
vs 20M transiting — only 13% covered
E-W running ~2.4M spare · Fujairah near capacity · Jask offline since Sep 2024. Ramp-up time: days to weeks for Saudi E-W, Fujairah cannot scale.
Strategic Petroleum Reserves (IEA 2024)
CountryVolumeCover
🇺🇸 United States~395M bbl~45 days
🇨🇳 China~950M bbl~80 days
🇯🇵 Japan~470M bbl~150 days
🇪🇺 Europe (IEA)~1.2B bbl~90 days
🇰🇷 South Korea~96M bbl~90 days
🇮🇳 India~40M bbl~10 days
Reserves buy time, not salvation. IEA coordinated drawdown max: ~4.4M b/d — vs 20M at risk. India's 10-day cover most exposed. China's opaque reserves may overstate readiness.
Map Legend
Tanker route
Saudi E-W pipeline
UAE Fujairah bypass
Goreh-Jask (inactive)
Pipeline terminal
🇺🇸US base 🇮🇷Iran base
☢Nuclear facility
🔥Fire hotspot
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Historical Precedents
1973 Arab Oil Embargo +300%
$3→$12/bbl · US gas lines · Reshaped global energy policy for decades
1984-88 Tanker War Sustained
546 ships attacked · Insurance 500x · US "reflagging" operations in Gulf
1990 Kuwait Invasion +130%
Oil doubled in 2 months · $21→$46 · 4.3M b/d offline · SPR released
2019 Abqaiq Attack +15%
5.7M b/d offline · Largest single disruption ever · Recovered in weeks
2023-24 Houthi Red Sea +300% freight
Suez transits -50% · Cape reroute adds 10-14 days · Still ongoing
Hormuz closure dwarfs all precedents: 20M b/d vs Abqaiq's 5.7M or Kuwait's 4.3M. No modern equivalent exists.
Insurance & Freight Impact (Lloyd's)
5-10%
War-risk premium
vs 0.05% normal
$200K+
VLCC daily rate
vs ~$35K normal
War-risk on $100M hull = $5-10M per transit. Tanker owners refusing Hormuz passage. BDTI index expected to spike 500%+. 1984 Tanker War premiums were 100x — this would be worse.
Consumer Impact — Who Pays
$5-7
US gasoline/gal
vs $3.20 today
2-3M
b/d demand destroyed
60-80%
Recession probability
2-4%
GDP hit (importers)
Every $10/bbl increase ≈ 0.2% off global GDP. At $180 Brent (+$100), equivalent to ~2% GDP shock. Developing Asian economies and oil-import-dependent nations (India, Japan, Turkey) hit hardest.
Downstream — Key Refineries at Risk (Platts)
FacilityCapacity
🇮🇳 Jamnagar (Reliance)1.4M b/d World's largest refinery · ~100% Gulf crude
🇰🇷 SK Ulsan840K b/d ~70% Middle East crude feedstock
🇨🇳 Rongsheng (Zhejiang)800K b/d Heavy Gulf crude dependency
🇸🇬 Shell Pulau Bukom500K b/d Singapore hub · mixed sources
🇯🇵 ENEOS Negishi270K b/d ~85% Middle East crude
Asian refining complex (~35M b/d) faces feedstock crisis within 2-4 weeks of full closure. Product cracks (gasoline, diesel, jet fuel) spike globally.
Timeframe to Reopen — Scenarios (ONI / USN)
Quick De-escalation 48-72 hrs
Diplomatic breakthrough · Iran backs down · Price spike +50%, rapid reversion
Mine Clearance Required 2-6 weeks
Iran deploys mines in shipping lanes · US/UK MCM ops · Gradual reopening
Sustained Combat 1-3 months
Active fighting in Gulf waters · IRGC fast-boat threat · Insurance blackout zone
Full Regional War 3-12 months
Multi-front: Hezbollah, Houthis join · Infrastructure destroyed · Structural repricing
Iran stockpiles ~6,000 naval mines (ONI est.). US 5th Fleet MCM: ~8-12 vessels. Full clearance: 4-8 weeks min. IRGC Navy operates 1,500+ fast-attack craft — can sustain harassment for months.
Escalation Timeline
Nov 2022
OPEC+ cuts reduce Saudi/Kuwait/UAE Hormuz flows by 1.6M b/d
Late 2025
Iran economic collapse; nationwide protests begin against the government
Jan 13, 2026
Iran: "ready for war." US amasses air/naval assets at scale not seen since 2003 Iraq invasion
Jan 28, 2026
Trump on Truth Social: "A massive Armada is heading to Iran"
Feb 3, 2026
6 IRGC gunboats attempt to seize US tanker in Hormuz. F-35 shoots down Iranian Shahed-139 drone approaching USS Abraham Lincoln
Feb 5, 2026
IRGC seizes two foreign oil tankers near Farsi Island, transfers to Bushehr port
Feb 17, 2026
Khamenei threatens US warships. Hormuz closed several hours during live Iranian military drill
Feb 24, 2026
Trump State of the Union: Iran reviving nuclear weapons. Missiles reaching Europe. Issues final ultimatum
FEB 28, 2026 — NOW
US & Israel launch joint military strikes. Iran retaliates. Middle East in full conflict.