Economic Elasticity Engine
Crude demand is famously price-inelastic in the short run. A 1% supply shortfall requires a 10% to 15% price spike to ration global consumption in the absence of rapid inventory draws or strategic petroleum reserves.
Geopolitical Oil Shock & Transmission Simulator
Simulate the market impact of diplomatic deals, maximum pressure sanctions, or military escalation in the Persian Gulf. Directly model net crude supply deficits, OPEC+ offsets, SPR interventions, and global cross-asset price transmission.
FLASH SQUAWK
TRUMP: “VERY BIG THINGS” COMING ON IRAN — IN “A DECIDING MODE”
Warning that options range from further military action to tightening economic pressure or reaching a negotiated deal.
Simulated Peak Brent
$112.50
▲ +$37.50 (+50.0%)
Net Physical Deficit
1.40 mb/d
1.37% global demand
US Headline CPI Shift
+0.82%
Direct + indirect passthrough
VLCC Dirty Tanker Rate
$94k/d
▲ +135% via route rerouting
12-Month Brent Price Trajectory ($/bbl)
Shock Trajectory
Baseline ($75/bbl)
Confidence Envelope
Macroeconomic & Cross-Asset Transmission Matrix
Based on standard econometric impulse response models
| Asset Class / Contract | Baseline | Shock Target | Directional Impact | Transmission Channel |
|---|
The Strait of Hormuz Choke
Approximately 20.5 million barrels per day—one-fifth of global petroleum consumption—transits through the 21-mile wide Strait of Hormuz. Limited bypass pipelines through Saudi Arabia and UAE can reroute at most 3.5 mb/d to Red Sea ports.
Portfolio Defense Strategy
Geopolitical supply shocks generate simultaneous stagflationary pressures: surging energy input costs, wider crack spreads, rising breakeven inflation, and compressions in cyclicals and consumer discretionary equity valuations.