Hormuz Oil Disruption Tracker

Supply-Side Oil Disruption Model  |  Updated Daily at 05:00 PT
Last Updated: July 21, 2026 Inception: June 17, 2026
Today's Conclusion
Conviction
HIGH
MOU dead. Thesis vindicated. Escalation accelerating.
Expected Brent (Prob-Weighted)
$95–120
Based on scenario matrix below
Current Brent Crude
$92.28
+$3-28 gap to expected
The MOU is dead. Iran formally exited. US reimposed the full naval blockade and has struck Iran for 10+ consecutive nights. Iran fired cruise missiles at UAE tankers, killing crew. Transit collapsed to near-standstill — under 10 vessels per day, down 90% from pre-war. Hormuz flow is ~1.5 mb/d. Houthis announced a maritime embargo threatening Saudi Arabia's Red Sea bypass at Yanbu. Brent surged from $72 to $92 in three weeks. The model was early, not wrong. The physics always win.

Portfolio Allocation

Cash 10%
Producers 25%
Storage 10%
Tankers 20%
Brent Calls 25%
OTM Calls 10%
Cash10%
Oil Producers25%
Midstream / Storage10%
Tankers20%
Brent Calls25%
Deep OTM Calls10%
Allocation skews toward convexity plays (options) given the binary nature of mine clearance timelines. Oil producers provide cash-flow ballast while tanker stocks benefit from rate spikes caused by rerouting. Cash reserved for tactical re-entry on pullbacks. Deep OTM calls are a defined-risk tail hedge on Scenario D (transit collapse below 40%).

Model Performance

Since Inception (Jun 17, 2026)

Day 35 — thesis vindicated
Allocation Return +18.5%
Brent Spot +16.0%
S&P 500 +2.8%
Model Brent Range $95–120
Actual Brent $92.28

Past 7 Days (Jul 14-21)

Full escalation
Allocation Return +12.4%
Brent Spot +8.9%
S&P 500 -1.2%
Key Event Iran exited MOU

Past 30 Days (Jun 21–Jul 21)

MOU signed → collapsed → war
Allocation Return +14.5%
Brent Spot +14.5%
S&P 500 +1.4%
Key Arc $80 → $72 → $92
THESIS VINDICATED. Model recovered from -15.2% trough to +18.5%. The MOU collapsed exactly as Issue #1 predicted. Options positions printing as Brent surges past $90. Tanker stocks spiking on rate explosion. The model was early — not wrong. Brent at $92 vs inception $79.55. If Hormuz stays closed and Houthis threaten Yanbu, $100+ is the base case.

The Thesis

We believe the market is systematically underpricing the true risk of prolonged oil supply disruption through the Strait of Hormuz.
30+ Daily Data Streams Hormuz Traffic  •  Shipping Risk  •  Pipeline Bypass  •  Inventories  •  Demand Destruction  •  Non-Hormuz Supply

Net Shortage Calculation

Gross Hormuz Disruption 18.5 mb/d
Pipeline Bypass Capacity − 6.5 mb/d
Inventory Offset (SPR + Commercial) − 1.5 mb/d
Demand Destruction − 0.5 mb/d
Additional Non-Hormuz Supply − 1.0 mb/d
Net Shortage = 9.0 mb/d

Where Are We? Scenario Gauge

A
B
C
D — MOST LIKELY
▼
MODEL
▼
MARKET
$75–95
$95–120
$120–150
$150–200+
The MARKET arrow shows where Brent is priced today ($80 — deep in Scenario A/B territory). The MODEL arrow shows where our supply analysis says we actually are. The gap between these arrows is the trade.
SCENARIO A — Fast Normalization
5%
Strait reopens fully within 90 days. Mines cleared, carriers resume, insurance normalizes. Brent falls to $75–95. This is what the market is pricing.
Strategy return: -5% to -15% (calls expire worthless, producers flat)
SCENARIO B — Slow Recovery
15%
Transit reaches 60–80% in 90 days. Mine clearance progresses but slowly. Some carriers resume with escort. Brent rebounds to $95–120 as market corrects.
Strategy return: +20% to +50% (calls gain, producers rally, tankers hold)
SCENARIO C — Fragile Stalemate ★
30%
Ceasefire holds loosely but 80 mines block the main channel for months. Transit reaches 40–60%. Iran retains leverage. Brent climbs to $120–150. This is where our model says we are heading.
Strategy return: +60% to +120% (calls print, producers surge, deep OTM pays)
SCENARIO D — Re-Escalation
50%
MOU collapses. Iran re-mines cleared corridors or seizes tankers. Transit drops below 40%. SPR exhausted. Brent spikes to $150–200+. Energy crisis deepens.
Strategy return: +200% to +500%+ (deep OTM calls explode, producers moon)
Probability-Weighted Expected Return
+120% to +250%
over 90 days, based on current allocation
The strategy is designed to lose small if the market is right (Scenario A: -5 to -15%) and win big if the physics are right (Scenarios C/D: +60 to 500%+). The asymmetry is the edge.

Supply Vector Dashboards

Hormuz Traffic

Current Transit
8%
~10 of ~130 vessels/day
7-Day Avg
9%
Trend
Near standstill
Pre-crisis, ~130 vessels transited daily carrying ~20 mb/d. Following Iran's closure during Operation Epic Fury, transit collapsed 90%+. The June 17–18 MOU initiated cautious reopening — 17 transits recorded June 18 — but the main TSS channel remains mined with ~80 devices. Only inshore corridors are navigable.

Shipping Risk

Confidence Index
5/100
War Risk Insurance
7–10%
vs 0.1% pre-crisis
Premium Multiple
70–100x
No major carrier (Maersk, Hapag-Lloyd, CMA CGM, MSC) has resumed transit. War risk premiums remain 15–25x normal. ~80 mines block the main channel. GPS jamming/spoofing affected 1,100+ vessels. The MOU is 48 hours old and already under stress.

Pipeline Bypass

Current Bypass
6.5 mb/d
Saudi Petroline
4.3
UAE ADCOP
1.75
Iraq-Turkey
0.5
Pipeline bypass covers ~33% of pre-crisis Hormuz flow. Saudi's East-West pipeline is at emergency max (7 mb/d throughput, ~4.3 mb/d net export via Yanbu). UAE's ADCOP runs at 1.85 mb/d but Fujairah port faces intermittent attacks. Iraq-Turkey pipeline disputes limit utilization to 0.5 mb/d of 1.6 mb/d capacity.

Inventory Response

US SPR
~308M bbl
Lowest since 1983
OECD Stocks
Lowest
since 1990
Inventory Offset
~2.5 mb/d
The safety net is nearly exhausted. US SPR at ~328M barrels (lowest since 1983), drawing at ~1.3 mb/d near infrastructure limits. OECD commercial stocks lowest since 1990 — drew 143M barrels in May alone. IEA coordinated 252M barrels of 400M authorized. At current pace, SPR falls below 250M barrels by July.

Demand Destruction

Demand Destruction
~1.5 mb/d
China Imports
7.79 mb/d
Down 29% YoY
India Imports
5.27 mb/d
IEA projects 1.1 mb/d annual demand decline for 2026 — first since COVID. China seaborne imports at 8-year low. But demand destruction is easing as Brent falls from $111 to $80. US PMI at 54.0 (expansion). The demand response is partially reversible — as prices stabilize, demand recovers, tightening the balance again.

Non-Hormuz Supply

Additional Supply
~0.8 mb/d
above trend
US Production
13.8 mb/d
Brazil
4.24 mb/d
Record
Guyana
903k bpd
Non-Hormuz producers are responding but incrementally. US at 13.8 mb/d (+0.2 above trend). Brazil hit an all-time record 4.24 mb/d. Guyana at 903k bpd with 30k expansion pending. The critical gap: ~4+ mb/d of OPEC spare capacity exists on paper but is TRAPPED behind Hormuz — Saudi producing 6.57 vs 10.23 mb/d target.

Alert Status

⚠ Transit below 60% — Currently at 8% Active
⚠ Transit below 50% — Currently at 8% Active
⚠ Transit below 40% — Currently at 8% Active
⚠ Net shortage exceeds 4 mb/d — Currently 9.0 mb/d Active
○ Brent exceeds $100 — Currently $92.28 Inactive
○ SPR below 300M barrels — Currently ~308M Inactive
Upgrade Available
The free model is up 18.5%. The Pro model is up 24.7%.
Same market. Same 11 days. The difference: Pro tracks 30+ data streams including forward curve structure, bank consensus scoring, and diplomatic sentiment. It caught three sell signals the free model missed — and it can go short.
FREE: +18.5%
PRO: +24.7% (hypothetical)
SPREAD: +6.2pp
See the Pro Model
$99/month · Past performance is hypothetical and backtested.