CHAOS THEORY · HORMUZ DISRUPTION MODEL

SUPPLY SNAPSHOT

Pre-War Baseline

20.7 mbd

GCC + Iraq + Iran + Oman

Available Now · Kpler + Bypasses

11.5 mbd

Strait 6.2 + E-W 4.4 + ADCOP 1.5 (net, non-overlapping)

RECOVERY PHASES

0–6mo

17.6

6–12mo

18.2

12–36mo

18.8

OMAN STATUS

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

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

PIPELINE BYPASSES

SAUDI E-W (Petroline) · 4.4 mbd
7 mbd capacity. Restored to full Apr 12 after drone strike. ~4.4 mbd net crude exports via Yanbu. Not in Kpler strait count.

UAE ADCOP · 1.5 mbd
Habshan→Fujairah. Near nameplate capacity. Additive bypass flow.

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 → Strait Open → Recovery KPLER 70%

Current: 9.2 mbd offline · 11.5 available 0-6mo post-open: 3.1 offline · 17.6 available 6-12mo post-open: 2.5 offline · 18.2 available 12-36mo post-open: 1.9 offline · 18.8 available

Recovery Timeline BY PRODUCER

0-6mo post-open 6-12mo post-open 12-36mo post-open

Nation Flow vs. Pre-War ALL PHASES

Base Model Table — Kpler 70% Adjusted

Disruption Type	Pre-War	Now (Kpler)	0–6mo	6–12mo	12–36mo	NT Cap
GCC — Strait (Saudi, UAE, etc.)	9.7	0	+4.9	+1.8	−1.2⁵ ↓	2.4 mbd
⬦ Saudi E-W Pipeline net export · Yanbu bypass	0.8¹	4.4 (+3.6)	4.4	~0.8² ↓	0.8²	Restored 4/12 · Yanbu cap ~4 mbd
⬦ UAE ADCOP Fujairah bypass	~1.1³	1.5 (+0.4)	1.5	1.5	1.5	Near nameplate (1.5 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	11.5	17.6	18.2	18.8	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 Kpler strait figure. Excluded from NT deficit. ~30% war-risk insurance premium is a structural cost headwind, not a supply disruption.

¹ Saudi E-W Pipeline — pre-war baseline 0.8 mbd: Kpler confirmed Jan–Feb 2026 average was only ~770k bpd. Historical norm was 1.7–2.8 mbd, depressed by OPEC+ cuts. Wartime conversion to 7 mbd capacity = +3.6 mbd incremental net export (4.4 − 0.8). Full 7 mbd pipe capacity is limited in practice by Yanbu terminal: nominal 4.5 mbd, tested ~4 mbd, Vortexa wartime estimate ~3 mbd.

² Dual-route capacity (critical caveat): When Hormuz reopens (6–12mo+), Saudi Arabia CANNOT simultaneously run E-W at 4.4 mbd AND resume full strait exports — total production capacity is ~12 mbd. Pre-war, KSA exported ~6.3 mbd total (5.5 mbd Hormuz + 0.8 mbd E-W). In recovery, E-W reverts to ~0.8 mbd baseline as crude flows back east to Juaymah/Ras Tanura. The E-W 12–36mo column therefore drops back to 0.8 mbd — it is a routing redirect, not new supply. Total 12–36mo recovers to ~18.8 mbd (partial recovery), not 26.1 mbd. Running both at full capacity simultaneously would require ~16+ mbd Saudi production (impossible — max capacity ~12 mbd).

⁵ GCC strait −1.2 mbd in 12–36mo: When E-W pipeline reverts to baseline (~0.8 mbd), Saudi crude flows back through Hormuz. However, the 12–36mo column reflects partial strait recovery only — GCC strait cumulative = 5.5 mbd vs 6.7 mbd in 6–12mo phase, a net reduction of 1.2 mbd as wartime routing unwinds. This is a routing redirect, not new production loss. Total GCC strait capacity at 12–36mo remains structurally capped at 7.3 mbd (9.7 pre-war minus 2.4 NT cap).

³ UAE ADCOP — pre-war baseline ~1.1 mbd: UAE diverted some volumes to Fujairah pre-war due to 2023–25 Houthi Red Sea disruptions. EIA estimated ~1.4–1.5 mbd utilized pre-war. Wartime net increase is modest (+0.4 mbd). ADCOP continues in recovery as a permanent routing preference — no reversal expected.

Saudi Dual-Route Capacity Analysis KEY CONSTRAINT

Route	Pre-War	Now (Wartime)	Net Add	12–36mo (Recovery)	Constraint
Strait of Hormuz (Saudi)	5.5 mbd	~0	−5.5	~5.5	Requires Hormuz open
E-W Pipeline (Yanbu)	0.8 mbd	4.4 mbd	+3.6	~0.8	Yanbu terminal ~4 mbd cap
Total Saudi Exports	6.3 mbd	~4.4	−1.9	~6.3	Max prod. ~12 mbd

⚠ CAN SAUDI ARABIA RUN BOTH ROUTES SIMULTANEOUSLY AT SCALE?

✗ NOT AT FULL WARTIME LEVELS: Running E-W at 4.4 mbd AND full strait exports (5.5 mbd) = 9.9 mbd total — requires ~12 mbd production with refineries. Saudi max capacity is ~12 mbd total. Physically possible at the margin, but leaves zero buffer and requires restarting all shut-in fields (Safaniya, Marjan, Zuluf, Abu Safa — all currently offline due to Iranian threats).

✓ HISTORICALLY YES (LOW E-W UTILIZATION): Pre-war Saudi ran both simultaneously — strait at 5.5 mbd + E-W at 0.8 mbd = 6.3 mbd total. That is the baseline. E-W was infrastructure held in reserve, not a parallel full-capacity export route.

→ RECOVERY REALITY: As Hormuz reopens (6–12mo+), crude flows back east to Juaymah/Ras Tanura (lower shipping cost, established tanker routes). E-W reverts to ~0.8 mbd logistics baseline. The 4.4 mbd wartime figure is a routing redirect, not new production. Total Saudi export capacity at recovery = pre-war ~6.3 mbd, not 6.3 + 4.4 = 10.7 mbd.

Sources: Kpler (Jan–Feb 2026 E-W baseline 0.8 mbd) · Fortune / S&P Global (7 mbd capacity, 2 mbd refinery draw, 5 mbd crude export) · EIA Hormuz Factsheet Feb 2026 (pre-war Saudi exports 5.5 mbd via Hormuz) · ENR / Vortexa (Yanbu terminal cap ~3–4 mbd practical)

Hormuz Pricing Model — Supply-Linked

mbd offline drawn from Supply Analysis · Russia/Ukraine 108-day blended rate · Brent & WTI · 4 phases

BRENT — · WTI —

Russia/Ukraine 2022 — 108-Day Blended Rate Benchmark (Feb 24 – Jun 11)

Pre-War Close
(Feb 23 2022)

Wtd. Avg
(108 days)

Avg Premium
Above Pre-War

Blended Rate
(÷ 1.5 mbd)

BRENT
MBD

$97.03

$113.83

+$16.80

$11.20/mbd

WTI
MBD

$92.24

$107.00

+$14.76

$9.84/mbd

Brent formula: 108-day weighted avg (Feb 24 – Jun 11, 2022, EIA) = $113.83 avg · Premium = $113.83 − $97.03 = +$16.80/bbl · Net mbd disrupted = 1.5 mbd → Brent rate = $11.20/bbl per net mbd
WTI formula: 108-day weighted avg (Feb 24 – Jun 11, 2022, EIA) = $107.00 avg · Premium = avg − $92.24 = +$14.76/bbl → WTI rate = $9.84/bbl per net mbd
Why 1.5 mbd? Russia exported ~5 mbd pre-war. Sanctions removed ~3 mbd from Western buyers, but India/China absorbed ~1.5 mbd at discount. Net global supply loss = ~1.5 mbd. This is the denominator for both blended rates.
Interpretation: The Brent blended rate ($11.20/mbd) is the primary calibration input. The WTI blended rate ($9.84/mbd) reflects the tighter US supply response and narrower Brent/WTI spread compression during the 2022 shock. Both capture spike + mean-reversion over the full 108-day window.

Hormuz Disruption — Pre-Event Closing Prices (Baseline for This Model)

Brent close
Day before Iran conflict

$73.19

Model base price →

WTI close
Day before Iran conflict

$67.29

Spread: −$5.90 Brent/WTI

Russia/Ukraine benchmark
Brent pre-war (Feb 23 2022)

$97.03

WTI: $92.24

Russia avg premium
(108-day blended)

+$16.80

÷ 1.5 mbd = $11.20/mbd

How the model works: Brent base = $73.19 (Iran conflict day-before close). WTI base = $67.29. Brent disruption rate = $11.20/mbd (Russia 108-day benchmark). WTI disruption rate = $9.84/mbd. Supply Disruption $ = rate × gross mbd offline. Brent = $73.19 + (Brent rate × gross mbd). WTI = $67.29 + (WTI rate × gross mbd). Sliders control gross mbd per phase directly.

Current

—

— mbd

0–6 months

—

— mbd

6–12 months

—

— mbd

12–36 months

—

— mbd

Brent & WTI — 4 Phases · Blended $/mbd Rate × Net mbd Offline

Brent forecast WTI forecast Live Brent Live WTI

Current (crisis peak)

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0–6 months

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6–12 months

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12–36 months

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Supply Feed — Live from Model Controls

Buffer / Supply Response

SPR / IEA releases (mbd) 3.0

Demand destruction (mbd)
Recession + tariff demand loss 0.0

Non-OPEC supply response (mbd) 2.1

Benchmark Rate & Base Prices

Brent blended $/mbd rate
Russia 2022 calibrated (108-day): $11.20/mbd 11.20

WTI blended $/mbd rate
Russia 2022 calibrated (108-day): $9.84/mbd 9.84

Brent base (pre-disruption, $/bbl)
Day-before-conflict close: $73.19 73.19

WTI base (pre-disruption, $/bbl)
Day-before-conflict close: $67.29 67.29

Global supply (mbd) 102

Gross MBD Offline per Phase

Adjust gross mbd offline per phase. Disruption premium = $11.20 × net mbd.

Current
Kpler 70% / bypass-adj. 9.2

0–6 months
Crisis ongoing 3.1

6–12 months
Partial recovery 2.5

12–36 months
Near-recovery 1.9

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 via the strait (Oman 5.6 mbd accounts for the majority). Pipeline bypasses add 5.9 mbd (Saudi E-W 4.4 + UAE ADCOP 1.5), bringing total available to ~11.5 mbd.

Physical destruction locks 4.2 mbd offline for 3–5 years regardless of ceasefire. Note: E-W pipeline reverts to ~0.8 mbd baseline as Hormuz reopens (6–12mo+) — flows shift back east. Dual-route full operation is physically impossible at Saudi max production ~12 mbd.

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