STRAITSANALYSIS
Global Commodity Market Disruption Analysis
Strait of Hormuz Closure
STRAITS Intelligence Analysis | 2026-03-14
STRAITS Maritime Intelligence Monitor (1,040 reports)
CRISIS DAY 14 — HORMUZ AT 97% COLLAPSE

[TL;DR] · [1. CRUDE OIL AND CONDENSATES] · [2. NATURAL GAS (LNG)] · [3. LPG (PROPANE + BUTANE)] · [4. FERTILIZERS] · [5. PETROCHEMICALS] · [6. FOOD IMPORTS TO GULF STATES] · [7. PIPELINE BYPASS ANALYSIS] · [8. PRICE PROPAGATION] · [9. GLOBAL ECONOMIC IMPACT] · [10. FINANCIAL MARKETS] · [11. STRATEGIC PETROLEUM RESERVES (SPR)] · [12. PORT CONGESTION] · [13. GREEN TRANSITION PARADOX] · [14. INTER-SECTOR DEPENDENCIES — LEONTIEF MULTIPLIER] · [15. SCENARIOS] · [16. SOURCES]

TL;DR
The Strait of Hormuz — through which 20% of global oil, 20% of LNG, and 35% of LPG flows — has been closed since March 2, 2026, following US-Israeli strikes on Iran. IRGC is actively mining and attacking tankers. Flow has dropped to 9% of normal (97% collapse). This is the LARGEST supply chain disruption of raw materials in history — surpassing the 1973 embargo, the 1984 Tanker War, and the 2019 Aramco attacks.

KEY NUMBERS:
- 20 mb/d of crude blocked (pipeline bypass covers max 35%)
- 81 Mt/yr LNG from Qatar — zero pipeline alternatives
- 35-40% of global LPG — India in cooking fuel crisis
- 33% of global fertilizers — 2026 planting season at risk
- Brent: $98-120/bbl (peak $119, largest single-day spike since 1988)
- SPR: IEA released record 400M bbl — covers ~30 days of deficit

1. CRUDE OIL AND CONDENSATES
Volume: 20 mb/d (2024-2025) = 25% of global seaborne oil trade

EXPORTERS THROUGH HORMUZ:
+---------------------+----------+--------+----------------------------------------+
| Exporter            | mb/d     | Share  | Notes                                  |
+---------------------+----------+--------+----------------------------------------+
| Saudi Arabia        | 5.5      | 37-38% | Pipeline bypass to Yanbu               |
| Iraq                | 3.3      | 22.8%  | Basra exports — 100% via Hormuz        |
| UAE                 | 1.9      | 12.9%  | ADCOP to Fujairah (1.5-1.8 mb/d)      |
| Kuwait              | 1.5      | ~10%   | Zero alternatives — full dependency    |
| Iran                | 1.2      | ~8%    | Goreh-Jask pipeline (0.3 mb/d)         |
| Qatar               | 0.7      | ~5%    | Dependent on Hormuz                    |
| Oman                | 0.4      | ~3%    | Partial bypass                         |
| Bahrain             | 0.05     | <1%    | Refinery hit 10.03                     |
+---------------------+----------+--------+----------------------------------------+

DESTINATION MARKETS:
+---------------+--------+----------+-------------------------------------------+
| Destination   | Share  | mb/d     | Closure implication                       |
+---------------+--------+----------+-------------------------------------------+
| China         | 37.7%  | 5.5      | 40% oil imports; ~4 month reserves        |
| India         | 14.7%  | 2.1      | 50% oil imports; fuel crisis              |
| South Korea   | 12.0%  | 1.7      | "Highest current account risk"            |
| Japan         | 10.9%  | 1.6      | 87% energy imported; 70% via Hormuz       |
| Rest of Asia  | ~9%    | 1.3      | Taiwan, Thailand, Singapore               |
| Europe        | ~8%    | 1.2      | 30% jet fuel from Gulf                    |
| Americas      | ~5%    | 0.7      | USA: 3% consumption — least affected      |
| ASIA TOTAL    | 84%    | 12.2     | EPICENTER OF CRISIS                       |
+---------------+--------+----------+-------------------------------------------+

2. NATURAL GAS (LNG)
Volume through Hormuz: ~10 Bcf/d = 20% of global LNG trade

FORCE MAJEURE TIMELINE:
  Mar 2:  Iranian drones hit Ras Laffan and Mesaieed
  Mar 4:  QatarEnergy declares FM on ALL gas contracts
  Mar 7:  Kuwait declares force majeure
  Mar 11: Shell declares FM on Qatar offtakes
  EFFECT: 5 consecutive days with ZERO LNG shipments — longest since 2008
          17 LNG carriers stuck off Ras Laffan

PRICE IMPACT:
+-------------------------+--------------+-----------------+---------+
| Benchmark               | Pre-crisis   | Current         | Change  |
+-------------------------+--------------+-----------------+---------+
| JKM (Japan-Korea)       | ~$10/MMBtu   | $23.40/MMBtu    | +134%   |
| TTF (Dutch)             | ~$11.1/MMBtu | $18.5/MMBtu     | +63%    |
| LNG carrier spot rate   | $40,000/d    | $300,000/d      | +650%   |
| 1-year charter          | $42,000/d    | $100,000/d      | +138%   |
+-------------------------+--------------+-----------------+---------+

Morgan Stanley: Qatar shutdown erased projected LNG surplus for 2026 —
market has shifted from oversupply to deficit.

COUNTRY IMPACT:
  Pakistan:    99% LNG from Qatar+UAE. Rolling blackouts. CATASTROPHIC.
  Bangladesh:  72% from Qatar+UAE. 4h daily gas cuts. Universities closed.
  India:       53% LNG from Qatar+UAE. SEVERE — Dahej terminal critical.
  South Korea: 15-35% gas supply. Coal ramp-up. MANAGEABLE.
  Japan:       ~5% LNG from Qatar. Nuclear restart as buffer. MANAGEABLE.
  Europe:      7-8% LNG. Diversified post-Russia. PAINFUL on price.
  China:       ~6% total LNG. Best positioned — Australia, US, pipeline.

Zero pipeline alternatives for LNG export — 100% seaborne dependency.

3. LPG (PROPANE + BUTANE)
Volume: ~1.5 mb/d = ~41.55 Mt/yr = 29% of global seaborne LPG trade

INDIA — EPICENTER OF LPG CRISIS:
332.1M active LPG connections. 104M are Ujjwala (poorest households).
Consumption: 31 Mt/yr. Imports: 60% (~18.2 Mt). 90% of imports via Hormuz.

  Price of 14.2kg cylinder: Rs 853 -> Rs 913 (+7%)
  Government response: LPG Control Order — refinery production +28% in 5 days
  Rationing: 25 days min between orders (urban); 45 days (rural)
  2 LPG ships (Mar 14): 92,700 t with Iranian clearance — covers ~1.5 days

  Health implications (WHO): Reversion to biomass/wood/dung:
  2.9M deaths/year from household air pollution.

Pakistan: 4-day work week. Bangladesh: universities closed. Max 2L/day motorcycles.

VLCC spot rate: $423,736/day (ALL-TIME HIGH) — +94% in 1 day.
CIF ARA propane: $590/t — +$106/t (+22%) IN 1 DAY.
Backwardation: ~$90/t — steepest in 14 years.

4. FERTILIZERS
~33% of global seaborne fertilizer trade passes through Hormuz.
~50% of seaborne urea behind the blockade.

UREA PRICES:
  NOLA: $516/t -> $683/t (+32%)
  Global: $465.5/t -> $585/t (+26%)
  SE Asia: +40% since conflict start

SULFUR: ME FOB $173/t (Jan 2025) -> $531.50/t (Jan 2026) = +207% even BEFORE closure.
Critical for: sulfuric acid -> phosphate processing (DAP/MAP) AND critical metals processing.

23 FERTILIZER SHIPS TRAPPED (Kpler, Mar 11):
Since Feb 28 ONLY 1 fertilizer ship left the Gulf.
Estimated cargo: 900,000-1,400,000 tons worth $500M-$1B.

2026 PLANTING SEASON AT RISK:
  US corn: CRITICAL — new fertilizer from Gulf won't arrive before April
  US soybean: Farmers may SHIFT acres from corn to soy (less N-intensive)
  EU wheat/rapeseed: Top-dressing window NOW — fertilizer needed
  India Kharif: 3-month window; India seeking urea from China
  Brazil safra 2026/27: "Extremely high risk" — Min. of Agriculture

SUBSTITUTION — NONE:
  China: Export restrictions until Aug 2026 — "off market"
  Russia: Limited (Ukrainian drones on N plants); sanctions complicate
  Organic: Years to scale. Sri Lanka 2021: forced organic -> rice -20%,
           food inflation 80%, government collapse

Carnegie Endowment: "4 billion people eat food grown with synthetic nitrogen
fertilizers. Half the global population lives thanks to these chemicals."

5. PETROCHEMICALS
GCC capacity: ~168 Mt/yr (2026) = 6% of global production. 74% for export.

POLYMER PRICES (March 2026 vs pre-crisis):
  HDPE:           ~$1,000/t -> $1,410/t (+41%)
  LLDPE:          ~$1,015/t -> $1,425/t (+40%)
  PP CFR China:   ~$950/t   -> $1,170-1,250/t (+25-30%)
  Naphtha Europe: $585/t    -> $695-700/t (+18%)

85% of PE exports from Middle East = ~10.6 Mt/yr through Hormuz.
Zero pipeline alternatives for petrochemicals.

DOWNSTREAM IMPACT:
  PACKAGING: GCC exports ~12.5 Mt PE + ~7 Mt PP.
  No packaging -> food waste increase -> food price inflation.

  AUTOMOTIVE: Average car uses 200 kg of plastic.
  Toyota cut production by 40,000 units (ME destination).
  Bosch, Continental, ZF: 100,000+ jobs at risk.

  MEDICINE: ME = ~20% of global PP exports -> syringes, IV bags, tubing.
  India produces 40% of global generics — 6%+ exports via Hormuz routes.

  TEXTILES: Polyester = 57% of global fiber production.
  "Sharpest textile shock since COVID-19" — feedstocks +25-40%.

3,200 ships (4% of global tonnage) stuck in Gulf.
~100 container ships (10% of global fleet). Transit: -97%.

6. FOOD IMPORTS TO GULF STATES
GCC imports ~$60-62B food annually (2024). Population: ~59M.

  Saudi Arabia: $25B imports, 80% imported, 4-6 month grain reserves
  UAE:          $25B imports, 80-85% imported, 4-6 month reserves
  Qatar:        $5.3B imports, 90%+ imported, 18 MONTH food reserves
  Kuwait:       $4-5B imports, 91% imported, ~3 month reserves
  Bahrain:      $2B imports, 92% imported, 2-3 months — desalination HIT

81% of GCC rice imports transit through Hormuz.

COUNTRY RISK PROFILES:

  BAHRAIN — MOST VULNERABLE:
  ├── 92% food imported
  ├── Island — only land link: King Fahd Causeway to Saudi Arabia
  ├── ~60% drinking water from desalination
  ├── DESALINATION PLANT HIT BY IRANIAN DRONE 10.03.2026
  ├── Reserves: 2-3 months (shortest in GCC)
  └── No ports outside Hormuz

  KUWAIT — HIGHLY VULNERABLE:
  ├── 91-95% food imported
  ├── 90% drinking water from desalination
  ├── Zero alternative maritime routes (100% through Hormuz)
  └── Reserves: ~3 months

  SAUDI ARABIA — BEST POSITIONED:
  ├── 80% food imported, BUT:
  ├── Red Sea ports (Jeddah, Yanbu) = 39% grains OUTSIDE Hormuz
  ├── SAGO: 4-6 month grain reserves
  ├── Self-sufficient in: dairy (Almarai), dates, eggs
  ├── BUT: Almarai cows eat imported corn and soy
  │   -> "dairy self-sufficiency" = fiction without feed imports
  └── SALIC: $8B farm portfolio (Ukraine, Australia, Brazil)

ENERGY-WATER-FOOD NEXUS — CASCADE FAILURE:

  1. HORMUZ closed -> energy exports blocked
  2. DESALINATION: INFRASTRUCTURE threat, not fuel threat
     • GCC = ~45-50% of global desalination (400+ plants)
     • GCC HAS oil/gas — fuel for desalination IS available
     • BUT: desalination plants = attack targets (Bahrain 8.03)
     • Desalination runs on GAS (~93%), not crude oil
       -> Qatar: Ras Laffan (gas production) hit by drones
       -> Gas exists, but processing infrastructure threatened
     • Saudi/UAE: sufficient resources for months/years
       -> risk = targeted attack, NOT fuel exhaustion
     • Bahrain/Kuwait: low diversification -> 1 hit = crisis
  3. WATER stable AS LONG AS infrastructure is intact
     • Qatar: ~5 days reserves in mega-reservoirs (post-2018)
     • Kuwait: 90% drinking water from desalination
     • UAE: target 45 days extreme emergency storage
  4. SHIPPING disrupted -> imported food doesn't arrive
     • 3,200 ships trapped (4% of global tonnage)
     • Surcharges: $1,500-4,000/container (war risk)
  5. FEED doesn't arrive -> "self-sufficient" sectors fail
     • Saudi corn 4.7 Mt/yr, barley 3.3 Mt/yr = all imported
     • Almarai cows eat imported soy/corn
     • Without feed: dairy, poultry, eggs = production collapses
  6. GCC FERTILIZERS blocked -> food inflation GLOBALLY
     • GCC exports 33% of global fertilizers
     • Double blow: food doesn't come in AND doesn't go out

RISK RANKING:
  1. Bahrain    ████████████████████ CRITICAL
  2. Kuwait     ███████████████████░ CRITICAL
  3. Qatar      ██████████████░░░░░░ PREPARED (18 months)
  4. UAE        ████████████░░░░░░░░ MEDIUM (Fujairah port)
  5. Oman       ██████████░░░░░░░░░░ LOWER (ports outside Hormuz)
  6. Saudi Ar.  ████████░░░░░░░░░░░░ LOWEST (Red Sea ports)

Hormuz is not just an energy chokepoint. It is an EXISTENTIAL chokepoint —
without it, GCC states lose access to energy, water, food and fertilizers
SIMULTANEOUSLY. There is no precedent for such a cascade.

7. PIPELINE BYPASS ANALYSIS
  NORMAL HORMUZ FLOW:            20.0 mb/d
  MAX PIPELINE BYPASS CAPACITY:   7.0-9.3 mb/d (35-47%)
  AVAILABLE BYPASS SPARE:          4.1-6.0 mb/d (20-30%)
  GAP (IMPOSSIBLE TO COVER):      11-16 mb/d (55-80%)

  BYPASS FOR LNG:                  0 mb/d (ZERO)
  BYPASS FOR LPG:                  0 mb/d (ZERO)
  BYPASS FOR FERTILIZERS:         0 Mt   (ZERO)
  BYPASS FOR PETROCHEMICALS:      0 Mt   (ZERO)

Pipelines cover max 35-47% of normal crude flow.
For LNG, LPG, fertilizers, petrochemicals and food —
NO ALTERNATIVES EXIST — 100% seaborne dependency.

8. PRICE PROPAGATION
CRUDE -> RETAIL PRICES (EIA/GS model):
  Oil +$10/bbl -> Gasoline +$0.25/gal (2-3 weeks)
               -> Diesel   +$0.30/gal (1-2 weeks)
               -> Jet fuel  +$0.35/gal (immediate)

  CURRENT (Mar 14, 2026):
  Brent: $98-105/bbl (pre-crisis: ~$89)
  Peak:  $119/bbl (Mar 10 — largest daily spike since 1988)
  Jet fuel Singapore: +72% to $225.44/bbl (RECORD)

CRUDE -> CPI INFLATION:
  Fed Reserve:  +10% oil = +0.15 pp CPI
  Goldman Sachs: +10% oil = +0.28% CPI
  GS 2026 US inflation revision: +0.8 pp to 2.9%
  Oxford Economics ($140/bbl): USA 5.5%, Eurozone 3.5%

FERTILIZERS -> FOOD -> CPI:
  Hormuz closed -> 33% global fertilizers blocked
    -> Urea: $475 -> $680/Mt (+43%)
      -> Farm production costs +15-30%
        -> Grain prices +10-25% (3-6 month lag)
          -> Food CPI +2 pp (6-12 month lag)

  CRITICAL TIMING: March-April = planting season (Northern Hemisphere)
  If fertilizers don't arrive by APRIL -> 2026 yield decline is certain.

9. GLOBAL ECONOMIC IMPACT
GDP IMPACT — SCENARIOS:
+---------------------+----------+----------+--------------+
| Scenario            | Oil      | Duration | Global GDP   |
+---------------------+----------+----------+--------------+
| Base (GS)           | $98 avg  | To Apr   | -0.3%        |
| Extended (GS)       | $110 avg | 1 month  | -0.5%        |
| Oxford Economics     | $140     | 2 months | -0.7% recess.|
| Extreme             | $147-200 | >3 months| -1.5 to -2.5%|
+---------------------+----------+----------+--------------+

ASIA — EPICENTER:
  Japan:       70% oil, 87% energy imported. Stagflation. Nikkei -8%.
  South Korea: ~75% oil from Gulf. "Highest CA risk." KOSPI -11%.
  India:       50% oil, 60% LPG. Cooking fuel crisis. Food inflation.
  China:       40% oil imports. Reserves ~4 months. Best positioned.

  Rule of thumb for Asia: each +$10/bbl = +0.3-0.7 pp inflation
                          and -0.3-0.5% current account.

EUROPE: Already stressed post-Russian gas cutoff.
  30% jet fuel from Gulf -> forecast: 20,000+ cancelled flights.
  Oxford Economics: Eurozone and UK recession at $140/bbl for 2 months.

USA: Most insulated (net energy exporter).
  GS: GDP -0.3 pp to 2.2%; recession probability +5 pp to 25%.

EMERGING MARKETS: Most devastating impact.
  Precedent: after 1973 crisis, debt of 100 oil-importing developing
  countries rose by 150% in 4 years (IMF).

Yellen: "The Iran situation puts the Fed even more on hold,
more reluctant to cut rates."

10. FINANCIAL MARKETS
BRENT CRUDE:
  Pre-war: ~$70/bbl (Feb 27)
  +6 days: $90/bbl (+28%)
  Peak intraday: $119.50/bbl (Mar 9)
  Close >$100: Mar 12 (first since Aug 2022)
  Current: ~$100-101/bbl
  Intraday swings: -12% (Mar 10 ceasefire hopes), +9% (Mar 12 rebound)

FREIGHT RATES:
  VLCC spot:             $423,736/day (ALL-TIME HIGH) — +94% in 1 day
  LNG carrier spot:      $300,000/day (+650% from $40K)
  SCFI Middle East:      $3,220/TEU (+40.8% w/w)
  CMA CGM surcharge:     $2,000-4,000/TEU (Emergency Conflict)

22% of global tanker fleet immobilized. Transit: -92-99%.

MARINE INSURANCE — "THE INVISIBLE SIEGE":
  War risk premium: 0.2% -> 3.0% hull value (12x) in 2 weeks
  = ~$7.5M per VLCC transit
  7 of 12 P&I Clubs filed 72h cancellation notices
  "It's NOT missiles that closed the strait — it's INSURANCE"

EQUITY WINNERS:
  Exxon, Chevron: ALL-TIME HIGHS
  Tankers (Frontline, Nordic American, DHT): +59-63% YTD
  Defense (Lockheed +40% YTD, RTX +110%)

EQUITY LOSERS:
  Airlines: "Market bloodbath" — Delta 21.73% bankruptcy prob. (24m)
  American Airlines: EBITDA -46%
  S&P 500: 2026 low = 6,672 (Mar 13)

CENTRAL BANKS:
  Fed: Hold rates; cuts "deferred" -> potential HIKES
  ECB: Hold; up to 2 hikes priced (previously: cuts)
  BOJ: Already +25bp in Jan; yen ++4% = imported inflation

COMMODITY CONTAGION:
  Gold:       ~$5,175/oz (spike to $5,423). JPM target: $6,300.
  Urea NOLA:  $683/t (+32%). Agricultural panic.
  Soybeans:   +13.9%. Soybean oil: +30.1% (2-year high).
  Aluminum:   JPM Q2: $3,200/t (230K-ton deficit forecast)
  Copper:     JPM Q2-Q3: $13,500/t (130K-ton deficit)
  HDPE:       $1,410/t (+41%). Packaging crisis.

11. STRATEGIC PETROLEUM RESERVES (SPR)
CURRENT LEVELS:
  USA:       415M bbl (~55 days net import)
  China:     1.2-1.3B bbl (~4 months import)
  Japan:     ~500M bbl (~200+ days)
  IEA total: ~4B bbl

COORDINATED RELEASE:
  Mar 11: IEA authorized LARGEST release in history: 400M bbl
  US share: 172M bbl (43%)
  Called the "Oil Bazooka"

SUFFICIENCY ANALYSIS:
  HORMUZ DEFICIT:      ~13-15 mb/d (not coverable by pipeline)
  SPR RELEASE:         400M bbl
  DEFICIT COVERAGE:    400M / 13M/d = ~30 DAYS

  CONCLUSION: SPR buys WEEKS, not MONTHS.
  If Hormuz closed beyond April -> SPR runs out.
  Market knows this — Brent holds >$100 despite record releases.

12. PORT CONGESTION
GULF PORTS — OPERATIONAL STATUS:
  Jebel Ali (UAE):   CLOSED — zero arrivals for 7 days. ~135K TEU ($4B cargo)
  Khalifa Port (UAE): Operational with crisis management
  Dammam (Saudi):    All carrier services SUSPENDED
  Hamad Port (Qatar): Reduced activity; food terminal active
  Bandar Abbas (Iran): SEVERELY DAMAGED — burning 24h+

SCALE OF ENTRAPMENT:
  Total: 3,200 ships = 4% OF GLOBAL TONNAGE
    Tankers:     329, including 77 VLCC (8.5% of VLCC fleet)
    Containers:  114 (~10% of global container fleet)
    LNG carriers: 88 operating / 14 detained
    At anchor:   500+ off UAE/Oman coastlines

  CONTAINERS TRAPPED: 200,000-450,000 TEU
  Jebel Ali alone: ~135,000 TEU ($4B cargo value)

BYPASS PORTS:
  Khorfakkan (UAE): KEY BYPASS — 15% of all tracked diversions
  Salalah (Oman):   OPS SUSPENDED — Iranian drones Mar 11
                    "Hub-eliminating damage" — Iran targeted the bypass
  Jeddah (Saudi):   EMERGING PRIMARY HUB (7.5M TEU after $800M expansion)

Cape of Good Hope rerouting: +10-15 days (some routes +49 days).
+$1-2M/voyage in additional bunker fuel.

SUPPLY CHAIN TIMELINE:
  Week 1-2:  Ocean freight to Gulf STOP. Diversions +360%.
  Week 4-6:  CONTAINER SHORTAGE hits Asian factories.
  Week 4-8:  European consumers feel impact.
  Week 6-12: US retailers feel impact. PE shortages -> packaging -> food waste.

13. GREEN TRANSITION PARADOX
RENEWABLES ARE NOT A BENEFICIARY — THEY ARE A VICTIM

Every element of the green transition REQUIRES crude oil for manufacturing.
Hormuz closure simultaneously:
  INCREASES long-term economic case for renewables
  (high oil = renewables more profitable to operate)
  DECREASES near-term ability to BUILD renewables
  (more expensive materials, freight, components)

SOLAR PV — OIL DEPENDENCY ANATOMY:
China produces >80% of global PV panels. China imports 40% of oil via Hormuz.

  Polysilicon (~40% of module cost): indirect (coal/coke)
  Aluminum frames (~14%): DIRECT — petroleum coke as anodes
  EVA encapsulant (~5-7%): DIRECT — EVA = ethylene from naphtha (69%)
  Backsheet (~3-5%): DIRECT — PET from petroleum
  Transport (+5-10%): DIRECT — VLSFO from crude; freight already +25%

  25-35% of PV module material costs come from oil/petrochemicals.

WIND TURBINES: Same dependencies.
  Blades: epoxy resin (oil). Carbon fiber: 90-96% from PAN (propylene).
  Lubricants: 100% petroleum-derived. Cables: XLPE insulation.

BATTERIES / EVs: Full dependency.
  Electrolyte: EC, DMC, DEC — from ethylene oxide (oil). No substitute.
  Separator: PE/PP micropores — 100% oil. No substitute.
  Synthetic graphite anode: Petroleum coke + pitch. No alternative at scale.

NET EFFECT:
  Short-term (0-6 mo): PV/wind/battery costs +10-20%
  Medium-term (6-18 mo): deployment -15-25% vs plan
  Long-term (18+ mo): investment grows but installed base lags pre-crisis
  "Green transition gap" extends by ~2-4 years

In H1 2025, renewables surpassed coal as the main source of global electricity.
The Hormuz crisis threatens to reverse that momentum.

14. INTER-SECTOR DEPENDENCIES — LEONTIEF MULTIPLIER
Wassily Leontief's input-output model (Nobel Prize 1973) describes how a
price shock in one sector propagates through the ENTIRE inter-industry matrix.
Every sector buys from others — oil feeds into transport, transport into food,
food into services. Leontief computed these dependencies as a coefficient
matrix: if we know the direct share of oil in a sector, we can calculate the
TOTAL impact (direct + indirect + induced).

$1 oil price increase -> $2.50-3.50 total economic impact.
This means the Hormuz shock is 2.5-3.5x larger than the oil price alone suggests.

OIL DEPENDENCY COEFFICIENTS BY SECTOR:

Crude oil is not just fuel — it is a molecular feedstock for thousands of
products with no short-term substitutes. 13% of global fossil fuels serve
as feedstock (not combustion).

+-------------------+------------------+-------------------+
| Sector            | Direct input     | Total (dir+indir) |
+-------------------+------------------+-------------------+
| Petrochemicals    | 30-40%           | 45-55%            |
| Road transport    | 25-35%           | 40-50%            |
| Plastics/rubber   | 25-30%           | 40-45%            |
| Agriculture       | 5.2% (energy)    | ~14.5% (w/fert.)  |
| Construction      | 8-12%            | 15-20%            |
| Pharmaceuticals   | 3-5%             | 10-15%            |
| Textiles          | 8-12%            | 15-25%            |
| Electronics       | 3-5%             | 8-12%             |
| Renewables mfg    | 10-15%           | 25-35%            |
+-------------------+------------------+-------------------+

LEONTIEF MULTIPLIER:
  $1 oil price increase -> $2.50-3.50 total economic impact
  (direct + indirect + induced effects)

CASCADE: OIL +50% -> SECTOR IMPACT:
+-------------------+----------+-----------------------+--------------------+
| Sector            | Cost rise| Hormuz amplifier      | Short-term substit.|
+-------------------+----------+-----------------------+--------------------+
| Petrochemicals    | +20-35%  | 85% PE from ME via Hor| Minimal            |
| Transport         | +15-25%  | Rerouting +10-20 days | Partial (rail)     |
| Renewables mfg    | +10-20%  | China 80% PV + oil    | None               |
| Agriculture/food  | +5-8%    | 1/3 fertilizers via H | Low                |
| Construction      | +7-12%   | Asphalt, aluminum     | Low                |
| Pharmaceuticals   | +10-20%  | India 40-50% oil Hor. | Low                |
| Textiles          | +8-15%   | Feedstock from ME ref. | Medium (cotton)    |
| Electronics       | +3-8%    | Resins, freight       | Low                |
| Batteries/EVs     | +10-20%  | Synth. graphite+solv. | None               |
+-------------------+----------+-----------------------+--------------------+

PHARMACEUTICALS — "World's pharmacy" at risk:
  ~99% of pharma raw materials from petrochemistry (BTX)
  India: 40-50% oil via Hormuz, 73-74% APIs from China
  Cascade: oil up -> India costs up -> Chinese APIs more expensive
  -> generics more expensive -> healthcare inflation in 200+ countries

FOOD SYSTEM (beyond fertilizers):
  30% of global energy consumed by food system (FAO)
  Pesticides: 95%+ petroleum-derived
  Food packaging: PE, PP, PET — all oil
  OIL +50% -> FOOD +5-8% retail

CHINA — WORLD'S FACTORY UNDER ENERGY PRESSURE:
  >80% PV panels, ~70% batteries, ~60% EVs
  Oil imports: 70% of consumption; 40% via Hormuz
  Coal-to-Chemicals: buffer, not substitute (6x worse CO2)
  PV panels: +8-15% at $120+, +20-30% at $150+/bbl

15. SCENARIOS
SCENARIO PROBABILITIES:
+----------------------------------------------+--------+--------+-----------+
| Scenario                                     | Prob.  | Brent  | Global GDP|
+----------------------------------------------+--------+--------+-----------+
| A: Resolution March-April                    | 25%    | $85-95 | -0.1-0.3% |
| B: Partial opening April-May                 | 40%    | $100-120| -0.5-0.7%|
| C: Closure through summer                    | 25%    | $130-160| -1.0-1.5%|
| D: Structural closure >6 months             | 10%    | $150-200| -2.0-3.0%|
+----------------------------------------------+--------+--------+-----------+

SECTORS MOST AT RISK:

  IMMEDIATE (1-4 weeks):
  ████████████████████ Maritime transport — rates +25-45%, insurance 5x
  ████████████████████ Aviation — jet fuel +72%, flight cancellations
  ███████████████████░ LPG/cooking — humanitarian crisis
  ██████████████████░░ Tankers — trapped ships, zero flow

  SHORT-TERM (1-3 months):
  ████████████████████ Asian refineries — no feedstock
  ███████████████████░ Fertilizers — 2026 planting at risk
  ██████████████████░░ Petrochemicals — polyethylene, packaging
  █████████████████░░░ Automotive — fuel + components

  MEDIUM-TERM (3-12 months):
  ████████████████████ Food — 2026 yields down, prices +10-25%
  ███████████████████░ Developing countries — debt, currencies, stability
  ██████████████████░░ Airlines — bankruptcies
  █████████████████░░░ Consumption — inflation erodes purchasing power

  LONG-TERM (12-24 months):
  ████████████████████ Energy geopolitics — end of status quo
  ███████████████████░ Bypass infrastructure — $50-100B investment
  ██████████████████░░ Green transition — SLOWED (paradox)
  █████████████████░░░ Reshoring/nearshoring — supply chain diversification

16. SOURCES
STRAITS Intelligence:
  1,040 reports on Hormuz (339 critical, 299 high, 297 elevated)
  11 daily briefings (Mar 1-14, 2026)
  259 AI syntheses

Export Data:
  EIA: Strait of Hormuz oil flows (2025)
  IEA: Strait of Hormuz Factsheet 2026
  Kpler: Global Fertiliser Dependency on Gulf Exports
  GPCA: GCC Petrochemical and Chemical Industry 2024

Economic Analysis:
  Goldman Sachs: Oil Price Reset (March 2026)
  Oxford Economics: Hormuz Disruption Economic Impact
  CSIS: Chokepoint — How the War with Iran Threatens Global Food Security
  WEF: The Global Price Tag of War in the Middle East
  UNCTAD: Strait of Hormuz Disruptions — Implications for Global Trade

Renewables/Petrochemistry Dependencies:
  IEA: Solar PV Global Supply Chains (2024)
  IEA: Impact of Commodity and Energy Prices on Solar PV, Wind and Biofuels
  BCG: Opportunities in Global Ethylene Economics
  US DOE: Solar PV System Cost Benchmarks
  NREL: Materials Used in US Wind Energy Technologies

Media:
  CNBC, Bloomberg, Al Jazeera, Reuters, Financial Times,
  Fortune, Axios, CNN, Insurance Journal, Lloyd's List

Sources: STRAITS Maritime Intelligence Monitor — 1,040 reports, 11 daily briefings, 259 AI syntheses.
Export data: EIA, IEA, Kpler, GPCA, Vortexa.
Economic analysis: Goldman Sachs, Oxford Economics, CSIS, WEF, UNCTAD.
Media: CNBC, Bloomberg, Al Jazeera, Reuters, Financial Times.
LinkedIn · rmn [at] project45.pl
If you find errors, want to suggest additions, or have data that should be here — write me.