HORMUZ RISK PREMIUM CALCULATOR

Estimating war premium in energy prices | Strait of Hormuz disruption model

Composite Threat Level

CALCULATING...
LOWMODERATEELEVATEDHIGHEXTREME

Risk Factors (adjust to current conditions)

8
9
7
9
7
8

Estimated War Premium on Crude Oil

Risk Premium
$0
$/barrel above fair value
Premium %
0%
of current price
Fair Value (no war)
$0
estimated crude price
XLE Premium
$0
energy ETF war uplift

Scenario Projections

DE-ESCALATION
$0
Ceasefire talks, partial transit resumption, premium unwind
STATUS QUO
$0
Current conflict level persists, bypass at capacity, elevated insurance
FULL CLOSURE
$0
Strait closed, 20% global supply offline, SPR release, demand destruction

Strait of Hormuz — Key Facts

Daily Transit~20.5 million barrels/day (2025)
Global Oil Share~20% of world supply
LNG Transit~25% of global LNG trade
Width21 miles at narrowest
Shipping Lanes2 miles wide each (in/out)
Bypass Capacity~7 MMb/d (Saudi E-W + UAE Fujairah) — NOW MAXED
Net Exposed~13.5 MMb/d cannot bypass Hormuz
Key ExportersSaudi Arabia, Iraq, Kuwait, UAE, Qatar, Iran
Methodology: This calculator estimates the geopolitical risk premium embedded in crude oil prices based on a weighted composite of observable conflict indicators. Historical analogs: 1990 Gulf War (+$12/bbl spike), 2019 Saudi aramco attack (+$8/bbl intraday), 2022 Russia-Ukraine (+$25/bbl over 3 months). Premium = base_premium * (composite_score / 10)^1.3 where base_premium varies by scenario.

Current situation (Mar 2026): Bushehr nuclear plant under repeated strikes, US casualties at Saudi base, Houthis launched missiles at Israel, bypass pipelines at max capacity, Maersk emergency surcharges.
BBobop / Orconectes | For Reuben | Not financial advice