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Show HN: I simulated closing the Strait of Hormuz on real oil trade data

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Re: Show HN: I simulated closing the Strait of Hormuz on real oil trade data

#61

Post by scheme271 »

anigbrowl wrote: post #35

An interesting fact to consider is that the US stockpile (the Strategic Petroleum Reserve) is reported as the total of sour (high sulfur) and sweet (low sulfur) crude oil. The sweet stock makes up about 1/3 of the reserve and hardly varies at all. This is because US refineries are virtually all configured for sour crude: due to a mistaken belief in the 1990s that sweet crude was running out, the industry bet the farm…

I think the reserves have more complex dynamics. The law requires 250 million barrels to be kept but the pumping rate decreases as more is pumped. Also, there's various estimates that indicate that the storage areas will lose structural integrity and start to collapse at levels higher than 250M barrels. I'm not sure anyone really knows about the levels for sure and the best estimates are probably kept secret for security reasons.

Re: Show HN: I simulated closing the Strait of Hormuz on real oil trade data

#62

Post by wombatpm »

veqq wrote: post #42
anigbrowl wrote: post #35

An interesting fact to consider is that the US stockpile (the Strategic Petroleum Reserve) is reported as the total of sour (high sulfur) and sweet (low sulfur) crude oil. The sweet stock makes up about 1/3 of the reserve and hardly varies at all. This is because US refineries are virtually all configured for sour crude: due to a mistaken belief in the 1990s that sweet crude was running out, the industry bet the farm…

> virtually all configured for sour crude They have retooled them in the past 40 years for the actually accessible inputs and desired distillates.

Converting from sour to sweet is easier than sweet to sour. Because the sulfur in sour is the catalyst killer. You may have issues in the early processing steps because of lower viscosity, but you can do blending if necessary.

Re: Show HN: I simulated closing the Strait of Hormuz on real oil trade data

#63

Post by anigbrowl »

anigbrowl wrote: post #35

An interesting fact to consider is that the US stockpile (the Strategic Petroleum Reserve) is reported as the total of sour (high sulfur) and sweet (low sulfur) crude oil. The sweet stock makes up about 1/3 of the reserve and hardly varies at all. This is because US refineries are virtually all configured for sour crude: due to a mistaken belief in the 1990s that sweet crude was running out, the industry bet the farm…

Should have said 'extremely uneconomical to switch. Sorry for the confusion.

Re: Show HN: I simulated closing the Strait of Hormuz on real oil trade data

#64

Post by alephnerd »

walrus01 wrote: post #60
alephnerd wrote: post #59

Earlier quoted context omitted.

> China has also been sending extensive signals of "we support you and will engage in full trade with you, and retain full diplomatic relationships, etc, no matter what you're doing to your own people domestically" to the Taliban in Afghanistan. Stuff like offering China has started disengaging with the Taliban now that Pakistan is fighting a war against them and after the Taliban are sending their leadership to Indi…

> and the Pakistani Taliban (which has the same leadership as the Afghan Taliban) has continued to attack CPEC [3] and targeting Chinese personnel [4]. Is it a fair assumption that a major factor in this in China's long term and continuing military cooperation with Pakistan? Joint fighter/attack jet development programs for air force, etc. It's my understanding that China has very friendly relations with the generals…

China's on the fence about transferring newer Chinese tech like the J-35 to Pakistan because the F-16 remains the backbone of the PAF [0] and American military personnel remain deployed in Pakistan to maintain the fleet.

Also, the current dictator in charge of Pakistan leans pro-America after the US allegedly helped overthrow Imran Khan [1][2].

And this is what makes it so difficult for China - opposing the IRGC makes it easier for Pakistan, Cambodia, Laos, and others to justify enhancing engagement with the US at the expense of China while supporting the IRGC means dealing with the extended logistical shock while backing an organization that views both Western and Chinese investors negatively and undermining long-term engagement with the GCC.

[0] - https://thediplomat.com/2026/07/why-china-will-not-sell-5th-...

[1] - https://www.dropsitenews.com/p/pakistan-mediator-united-stat...

[2] - https://ia601601.us.archive.org/11/items/cypher-pakistan-i-0...

Re: Show HN: I simulated closing the Strait of Hormuz on real oil trade data

#65

Post by anigbrowl »

cheschire wrote: post #47
anigbrowl wrote: post #35

An interesting fact to consider is that the US stockpile (the Strategic Petroleum Reserve) is reported as the total of sour (high sulfur) and sweet (low sulfur) crude oil. The sweet stock makes up about 1/3 of the reserve and hardly varies at all. This is because US refineries are virtually all configured for sour crude: due to a mistaken belief in the 1990s that sweet crude was running out, the industry bet the farm…

Random internet person says something that nobody is talking about. Gemini says random internet person is exaggerating the severity on most points. I guess I’ll wait and see if someone provides citations because this feels like a nothing burger.

We are talking about this, because we're discussing a model of oil price vs availability which includes modeling of national oil reserves. I'm pointing out that the popularly understood amount of US reserve levels somewhat overestimates the available cushion, and provided two different and easily verifiable reasons for considering it to be smaller than the headline number. I also specified that I was oversimplifying for the sake of brevity. I also indicated which assumptions and approximations were inputs in my heuristic.

You could easily ask Gemini to critically appraise each of these steps and get the detail you feel you're lacking; I know this because I employed it over the last few months to research this topic, but did so in piecewise fashion. Apparently you opted for the easier 'ctrl-V is this true' type of inquiry, which reflected your natural skepticism back toward you.

Re: Show HN: I simulated closing the Strait of Hormuz on real oil trade data

#66

Post by tolciho »

eliotho wrote: post #9
firasd wrote: post #8

Very interesting. Here in India people were very concerned about potential cooking gas shortages (LPG) when the disruptions began which is also a good example of usually-overlooked dependencies on the the Strait

and the interesting thing is that the common factor is that all these crises (oil, financial, gas) spread silently until a node collapses and there is a domino effect over the whole network

One might wonder whether the Late Bronze Age collapse had similar (copper, finance, tin) reasons for going the way it did.

Re: Show HN: I simulated closing the Strait of Hormuz on real oil trade data

#67

Post by Dylan16807 »

eliotho wrote: post #32
toomuchtodo wrote: post #30

Earlier quoted context omitted.

> China's decrease of 1.5 million barrels per day, representing a 9% decline, was by far the largest globally, the report said. Some global demand destruction is occurring, but that of China is them switching to large internal strategic reserves. https://youtu.be/BkA0bkb6ZO0 (whole video is worth the watch)

And this is what the model price formation assumes, and in fact, the silent mechanism that makes the crisis worse. Reserves silently deplete for each country, and each epoch where they exhaust is when the price rebalancing occurs IN A SUDDEN SPIKE, affecting other nodes that are not even connected to Hormuz, which is one of the conclusions of the paper. Either directly or indirectly all countries feel the pain: the q…

If the sudden spike is so bad, why would a country fail to taper their reserves?

Re: Show HN: I simulated closing the Strait of Hormuz on real oil trade data

#68

Post by eliotho »

Dylan16807 wrote: post #67
eliotho wrote: post #32

Earlier quoted context omitted.

And this is what the model price formation assumes, and in fact, the silent mechanism that makes the crisis worse. Reserves silently deplete for each country, and each epoch where they exhaust is when the price rebalancing occurs IN A SUDDEN SPIKE, affecting other nodes that are not even connected to Hormuz, which is one of the conclusions of the paper. Either directly or indirectly all countries feel the pain: the q…

If the sudden spike is so bad, why would a country fail to taper their reserves?

this is an interesting market design question: the point is that tapering would require everyone knowing everyone else's depletion clocks. As they are unknown (sanctioned trade, non-public state figures), the opacity is the game itself (that I called game of chicken in other comments). Surely the main players are trying hard to guess each other's numbers by every mean possible

Re: Show HN: I simulated closing the Strait of Hormuz on real oil trade data

#69

Post by conductr »

sebmellen wrote: post #50
neom wrote: post #48

Tangentially related but just watched this pretty interesting youtube mini-doc-thing about the recent moves China has been making regarding oil (and its bigger picture): https://www.youtube.com/watch?v=BkA0bkb6ZO0

That video was masterfully done, and it’s shocking how quiet the mainstream and financial media has been about this topic. Everything is an AI chip story, and the looming oil crisis is completely under discussed because we have goldfish memories and can’t appreciate what a massive move China made.

It won’t be a proper crisis if we knew it was coming, media will go full tilt when they actually see and feel it and They’ll act like it came out of nowhere. Until then, did you hear Taylor Swift got married!?

Re: Show HN: I simulated closing the Strait of Hormuz on real oil trade data

#70

Post by doctorwho42 »

tolciho wrote: post #66
eliotho wrote: post #9

Earlier quoted context omitted.

and the interesting thing is that the common factor is that all these crises (oil, financial, gas) spread silently until a node collapses and there is a domino effect over the whole network

One might wonder whether the Late Bronze Age collapse had similar (copper, finance, tin) reasons for going the way it did.

Man those sea people closing the straight of Ur!
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