"Doomsday Report" Institution Field Visit: Hormuz Strait Enters New Phase of "Simultaneous Hot War and Business Diplomacy"

BlockBeats News, April 6, Citrini Research, author of the "Doomsday Report," released a "Hormuz Strait On-Site Inspection Report." Citrini Research sent an analyst proficient in four languages (including Arabic) to sail through the central Hormuz Strait for an on-site inspection to assess the actual situation of the strait.

The Citrini Research analyst stated that investors should abandon the "open/close" binary thinking. The reality of the Hormuz Strait is more complex, with a simultaneous occurrence of hot war and commercial diplomacy. The traffic volume is expected to gradually recover as the conflict continues. The ongoing events cannot be simply judged as "conflict escalation/de-escalation" or "strait open/close." The US is conducting military operations, while its allies (such as France, Japan, Greece) are actively negotiating navigation rights with Iran. This is a typical symptom of a multipolar world.

Currently, Iran has established a functional navigation checkpoint between Qeshm Island and Larak Island, where all approved traffic is guided through Iranian territorial waters (rather than traditional sea lanes). Vessels or their countries of origin contact Iran through intermediaries, submit information such as ownership, cargo, crew, and pay a passage fee. After review, they receive a confirmation code and are escorted through, while unapproved vessels remain waiting.

The analyst stated that Iran's position is "not wanting to close the strait." Its goal is to establish a sovereignty system similar to Turkey's management of the Bosporus Strait, controlling navigation, collecting fees, allowing commercial traffic to operate, shaping itself as a responsible global trade manager, and isolating the US.

There are demands for Iran to open the strait without fees, accompanied by military strikes. However, a complete strait closure would lead to a global economic catastrophe (current estimated net loss of 10.6 million barrels per day in global commercial crude oil inventory). Most other countries (the list is rapidly expanding, including China, India, Russia, Japan, France, Malaysia, etc.) choose to make deals with Iran to secure their energy supply.

The analyst predicts that while the conflict continues, the strait's traffic volume will increase. The process will be chaotic, with mainly LPG and small oil tankers passing through, while large oil tankers like VLCCs remain less frequent. This is not enough to avoid a global economic collision but is far better than a complete shutdown. However, Iran is proactively restraining Houthi forces' actions in the Red Sea/Strait of Mandab, using it as an escalation card that has not yet been played.

Regardless of the strait's status, freight rates will remain high, and oil tanker stocks may not have peaked (e.g., BWET). The Federal Reserve may see through the conflict's impact, leaving room for bringing forward rate cut expectations, meaning a rate cut may happen earlier than currently priced by the market, with further room for this "early" expectation to expand.