The Next Hormuz

A framework for identifying the geopolitical ruptures capable of 50-200% commodity price dislocations, and which ones the market has already stopped pricing.

Every major commodity shock in history was visible before it happened. The models existed. The scenarios were published. The concentration data was in every annual report the relevant governments filed. The numbers were not hidden.

The market knew. It just decided, every quarter, that paying continuously for a risk that had not yet activated cost more than absorbing the shock when it eventually did. That is not irrationality. That is a perfectly rational response to the wrong time horizon.

The problem is that the shock, when it comes, does not arrive on the schedule the quarterly optimisation assumed. And by then, the premium that was never paid becomes the loss that cannot be avoided.

Five scenarios satisfy those conditions today. None of them are adequately priced.