Rory Johnston

And if you go back and read Dune in particular, it's pretty clear that Frank Herbert was talking about oil and this particular patch of geography across the world.

Like this is a story.

This is a narrative that we've been watching for a very, very long time.

And honestly, if you had asked me three months ago,

Rory, will the Strait of Hormuz be closed this year?

I would have said absolutely not.

I have been in this market now for going on 12, 14 years as an analyst ever since I got into this.

the perennial kind of every year, every month, you would hear someone talking about how Iran was about to close the Strait of Hormuz.

It was the boogeyman scenario forever.

And it never happened.

Even during the Iran-Iraq war in the 1980s, when you had way more fire across and attacks on shipping in the Strait, you never saw shipping through the Strait stop.

So it was always this kind of bizarre kind of thought experiment that we'd never thought we would see realized.

So the overall supply loss to date is the largest supply shock in the history of the oil market, though we have not yet felt the full weight of that pricing impact, as I'm sure we will discuss.

Before getting into the kind of comparisons to historical, it's important to talk about the offsets and the kind of ways that we have reduced it from that full one fifth, 20 million barrels.

In total, the actual supply hit to the market is somewhere right now around 13 million barrels a day.

And that factors for a couple successful reroutings away from transits that normally occurs with the Gulf, the most notable of which is Saudi Arabia's east-west pipeline that travels from the Gulf side of Saudi Arabia all the way west to the Red Sea to terminate at the industrial port of Yambu.

And that pipeline has about a capacity of 7 million barrels a day, and you had two to two and a half traveling on it before.

So, you know, you've got four and a half to five million barrels a day of switching capacity in the Gulf.

So that's been that's been the biggest offset that brought us from like 20 to 15.

Then you also have some, you know, a little bit of rerouting capacity in the UAE out to the port of Fujairah on the Omani coast, as well as you've also had Iranian oil bizarrely continuing to flow through the majority of this crisis thus far immediately prior to the blockade being imposed.