Persian Gulf Energy Crisis: 1–6 Month Price Equilibrium Model

Forecast Horizon Range 2 Months (60 Days)

Select how many months the current supply conditions are assumed to persist (1 to 6 months).

Strait of Hormuz (SoH) Outflow 5.04 Mbpd

Latest 28-day daily crude transits leaving the Persian Gulf

Gulf of Oman (GoO) Bypass Flow 2.49 Mbpd

Pipeline export terminals located outside the Strait (Fujairah & Jask)

Total Global Reserves 8,200 Mb

Total inventory in tanks, pipelines, and tankers worldwide

Locked Technical Floor (% Dead Storage) 95.3%

Unpumpable oil trapped in line-pack pressure and tank sludge bottoms

Price Elasticity of Demand (|ε|) 0.05

Short-run consumer price responsiveness (0.05 standard)

Supply Offsets & Run Cuts 2.30 Mbpd

Red Sea pipeline diversions, non-Persian Gulf surge, and run cuts

Operable Buffer

-- Mb

Net Daily Deficit

-- Mbpd

Buffer Runway

-- Days

2-Month Price (Est.)

$-- / bbl

Equilibrium Price vs. Hormuz Outflow (2-Month Horizon) Solid line is central forecast. Shaded band captures elasticity uncertainty and inventory reporting margins.

Model Methodology & Empirical Grounding

Parameter	Baseline	Epistemic Status	Economic Rationale & Academic Validation
Persian Gulf Pre-War Export	17.67 Mbpd	Established	Observed average seaborne crude departing the Persian Gulf during Jan/Feb 2026 (TankerTrackers.com satellite tracking).
Global Liquids Demand	103.0 Mbpd	Established	Consensus global petroleum consumption benchmarks (IEA & EIA monthly reports).
Forecast Horizon Scaling	1 to 6 Months (Default: 2 Months)	Established	Compares the physical storage runway against the disruption duration. If a disruption lasts longer than the buffer runway, the market transitions into unbuffered scarcity pricing.
Total Global Reserves	8,200 Million Barrels	Established	Total worldwide stocks tracked by the IEA, combining commercial storage, government reserves, non-OECD tanks, and waterborne transit.
Locked Technical Floor	95.3% (~7,815 Mb)	Contested	The non-negotiable volume required to maintain hydraulic line pressure and minimum refinery operating stock, plus unusable tank bottom sludge.
Demand Elasticity (\|ε\|)	0.05	Established	Short-run consumer price sensitivity. Highly inelastic because vehicles and industrial equipment cannot immediately substitute fuels.
Supply Offsets & Cuts	2.30 Mbpd	Emerging	Saudi Petroline flow to Yanbu on the Red Sea (~1.2 Mbpd surge), non-Persian Gulf production increases (~0.6 Mbpd), and Asian discretionary refinery run cuts (~0.5 Mbpd).

Plain-English Glossary:
• Mbpd: Million barrels per day (standard volume measurement of daily oil flow).
• SoH: Strait of Hormuz (the 21-mile marine bottleneck connecting the Persian Gulf to the open ocean).
• GoO: Gulf of Oman (open sea outside the Strait where bypass pipeline terminals operate).
• SPR: Strategic Petroleum Reserve (government-owned emergency crude stockpiles).
• Tank Bottoms: The unpumpable bottom layer of crude storage tanks containing sediment, water, and rust sludge; pumping below this level destroys downstream refinery machinery.
• Price Elasticity of Demand: A measure of consumer responsiveness. A value of 0.05 means an oil price surge of 20% reduces consumption by only 1%.
• Time Horizon Mechanism: Let D be the selected window in days (Months × 30). If storage runway R ≥ D, inventories survive the period and prices stay cushioned. If R < D, the cushion is breached before the horizon ends, forcing prices toward elasticity-driven demand rationing.