CHAOS THEORY · HORMUZ DISRUPTION MODEL

SUPPLY SNAPSHOT

Pre-War Baseline

20.7 mbd

GCC + Iraq + Iran + Oman

Available Now · Kpler

6.2 mbd

70% strait blockade confirmed

RECOVERY PHASES

0–6mo

11.7

6–36mo

16.5

38–60mo

20.7

OMAN STATUS

ACTIVE · 5.6 mbd
Flows bypass strait via Gulf of Oman. Physically uninterrupted.

~30% war-risk premium — cost headwind only.

NON-TRANSITORY DEFICIT

Physical Destruction Only

4.2 mbd

3–5yr structural cap

GCC: 2.4 — Sitra/Ras Laffan

Iraq: 1.0 — Basra Terminal

Iran: 0.8 — Shahid Dolati

GEOPOLITICAL STATUS

Strait StatusBLOCKADED Kpler Flow−70% Oman RouteOPEN Red SeaELEVATED Suez CanalPARTIAL

Total Supply — Pre-War → Full Recovery KPLER 70%

NOW: 6.2 mbd 0-6mo: 11.7 6-36mo: 16.5 38-60mo: 20.7

Recovery Timeline BY PRODUCER

0-6mo 6-36mo 38-60mo

Nation Flow vs. Pre-War ALL PHASES

Base Model Table — Kpler 70% Adjusted

Disruption Type	Pre-War	Now (Kpler)	0–6mo	6–36mo	38–60mo	NT Cap
GCC (Saudi, UAE, etc.)	9.7	0	+4.9	+2.4	+2.4	2.4 mbd
Iraq (Export + Basra)	4.0	0	+1.0	+2.0	+1.0	1.0 mbd
Iran (Domestic Depots)	1.4	0	+0.2	+0.4	+0.8	0.8 mbd
Oman (Logistics) *	5.6	5.6*	5.6*	5.6	5.6	War-risk only
Total Scope Returned	20.7 mbd	6.2	11.7	16.5	20.7	4.2 mbd

* Oman / Sohar (5.6 mbd): Flows outside the Strait via Gulf of Oman. Physically uninterrupted. Counted in 20.7 mbd baseline and 6.2 mbd currently transiting. Excluded from NT deficit. ~30% war-risk insurance premium is a structural cost headwind, not a supply disruption.

WTI / Brent — Elasticity Price Model

Supply-demand elasticity · Duration dampening · Market-implied vs physical shock · Backtested: Russia 2022

ECON-BASED

Full Formula

ΔPrice% = (OfflineMbd / GlobalSupply) / |e|
× DurationDiscount × (1 − BufferPct)

Physical shock = pure elasticity, no buffers, no duration discount
Market-implied = after SPR, demand offset, shale response, and market's expected resolution horizon
Gap = ceasefire optionality + structural deficit not yet priced

Backtest Anchor — Russia / Ukraine 2022

Supply removed: ~3 mbd · Global shock: ~3%
Pre-war WTI: ~$78 · Peak WTI: ~$125 · Peak Brent: ~$128
Implied short-run e₁: 0.056
Duration: ~6 weeks · SPR released: 62.7mb IEA · Demand: intact (post-COVID)

Supply Shock Inputs

Base Brent price ($/bbl)72.1

Global supply (mbd)102

e₁ · 0–6mo short-run
Russia '22 backtest: 0.056 -0.056

e₂ · 6–36mo medium-run
demand destruction begins -0.13

e₃ · 38–60mo long-run
academic consensus -0.25

Dampening Factors

Expected duration (mo)
market's resolution horizon 3.0 mo

SPR / emergency buffer (mbd)
IEA + national reserve releases 2.0

Demand offset / recession (mbd)
tariff + recession demand loss 2.5

P(ceasefire <3mo)
market resolution probability 40%

US shale response (mbd)
incremental non-OPEC supply 1.0

Scenario Presets

Step-by-Step Calculation

Physical shock

—

Brent undampened

Market-implied now

—

After all buffers

Mispricing gap

—

Physical − market

Duration discount

—

% of shock priced

Market Back-Solve — What Current Prices Are Saying

Price Comparison — All Phases · Brent (cyan) vs WTI (amber)

Physical shock Market-implied Recovery phases

Pre-conflict

Baseline · Jan 2026

Physical shock

No buffers · pure e₁

Market-implied

SPR + demand + duration

0–6mo return

Partial supply online

6–36mo return

Major infrastructure recovery

38–60mo return

Near full · NT deficit remains

Strait Parameters

Blockade severity %70%

Disruption months60

Return Assumptions — GCC 9.7 mbd

0–6mo return4.9

6–36mo addl2.4

38–60mo addl2.4

Return Assumptions — Iraq 4.0 mbd

0–6mo return1.0

6–36mo addl2.0

38–60mo addl1.0

Return Assumptions — Iran 1.4 mbd

0–6mo return0.2

6–36mo addl0.4

38–60mo addl0.8

Scenario Presets

Live Model Output

Price elasticity model controls have been moved to the PRICE MODEL tab for full-width analysis.

DAMAGE REGISTRY

TRAFFIC SEPARATION

INBOUND — NE CORRIDOR

OUTBOUND — SW CORRIDOR

Separation zone: 2nm buffer

IMO-designated TSS since 1999

Current status: SEVERELY RESTRICTED

KEY SITES

✕ Ras Laffan (Qatar) — LNG hub

✕ Sitra (Bahrain) — export terminal

✕ Kharg Island (Iran) — main oil terminal

✕ Basra (Iraq) — IOC hub

✕ Shahid Dolati — fuel depot

! Sohar Port (Oman) — war premium

! Bandar Abbas (Iran) — naval base

DATA SOURCES

KPLER TANKER TRACKING

● EIA.GOV OPEN DATA (KEY)

● JPM COMMODITIES RESEARCH

● AL JAZEERA / IRNA / INA

● OPENSTREETMAP / LEAFLET

● OTHER GRADES — SIMULATED

CHAOS THEORY OUTLOOK

Kpler AIS confirms 70% collapse through the strait. Only 6.2 mbd transiting — Oman's 5.6 mbd accounts for the majority.

Physical destruction locks 4.2 mbd offline for 3–5 years regardless of ceasefire.

The war-risk premium on Oman flows is a permanent structural cost increase — the "Hormuz Tax" that markets are not pricing.