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

globaloilnetwork.staffinganalytics.io

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

#1

Post by eliotho »

OP here: I created this visualization tool as the byproduct of a supply chain class I taught at Columbia. The pedagogical exercise grew into a full blown visualization and paper about global oil trade.

The model: The mechanics are the same as the financial network Eisenberg-Noe: Instead of banks, every country consumes oil interconnected via bilateral trading. Shocks propagate throughout the network, depleting oil reserves when bottleneck nodes (such as the Strait of Hormuz) are blocked.

Insights: The interesting part is the mechanics of how the crisis unfolds: for example, France receives 0 oil from Hormuz directly, yet their reserves are depleted faster because other countries reactively increase their safety oil stock, increasing oil price, making stockouts more expensive for everyone.

The model also gives price dynamics which are interesting on their own: the price increase is not immediate, it follows sequentially as countries reserves deplete.

Some caveats: 1. For producer nodes, depletion means their export slack is reduced/exhausted. 2. No sanctioned trade (UN Comtrade data)

Technical Details: The visualization is 600 lines of flask plus js frontend (LLM assisted visualization with ground-truth matching the original numerical exercise of the paper)

Paper with proofs/theory: https://arxiv.org/abs/2607.17491

Show HN: I simulated closing the Strait of Hormuz on real oil trade data
globaloilnetwork.staffinganalytics.io

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

#3

Post by HarHarVeryFunny »

What concrete predictions does your model make?

What developments in pricing/other would indicate that your model is wrong or incomplete?

Nice website regardless, but I'm a bit skeptical that the dynamics of the global oil/energy market can be accurately predicted.

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

#4

Post by eliotho »

HarHarVeryFunny wrote: post #3

What concrete predictions does your model make? What developments in pricing/other would indicate that your model is wrong or incomplete? Nice website regardless, but I'm a bit skeptical that the dynamics of the global oil/energy market can be accurately predicted.

>What concrete predictions does your model make?

Well, the model is less of a prediction and more of a stress testing tool. But under the hypothetical closure scenarios it shows the timing the oil reserves of distant countries exhaust, as well as the systemic effects on pricing (the France paradox).

>What developments in pricing/other would indicate that your model is wrong or incomplete? The model has a stylized way of incorporating pricing as a function of the total supply. In practice, when countries ration their oil that's beyond the scope of the model. That being said, the implied pricing trajectory is estimated and could be tested (the staircase graph showing prices constant while countries absorb the shock with their reserves and rebalanced whenever there is a reserve depletion).

>Nice website regardless, but I'm a bit skeptical that the dynamics of the global oil/energy market can be accurately predicted. Thank you! Indeed, but I think having at least a stylized testing tool might be useful for policymakers :$ (assuming decisions are ever data-driven lol)

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

#6

Post by refulgentis »

I really do appreciate the effort but the data doesn’t reflect current conditions, and it’s falsified given it’s been virtually closed for months, certainly the same as 30% throughout that is the models default parameter, and we didn’t see ex. prices at $150/barrel 3 weeks in, or a host of other things it predicts.

EDIT: I’m not saying it doesn’t matter the strait is closed - it does! - it’s just, what are we to do with a model that generically tells us oil barrel prices is at $150 3 weeks in, when we are months in?

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

#7

Post by eliotho »

refulgentis wrote: post #6

I really do appreciate the effort but the data doesn’t reflect current conditions, and it’s falsified given it’s been virtually closed for months, certainly the same as 30% throughout that is the models default parameter, and we didn’t see ex. prices at $150/barrel 3 weeks in, or a host of other things it predicts. EDIT: I’m not saying it doesn’t matter the strait is closed - it does! - it’s just, what are we to do w…

That's kind of the point because it hasn't been totally 100% closed. There's both sanctioned and unsanctioned oil flowing, which is the point of the scenarios in the simulation. Also it's more of a simulation/stress tool at a sustained closure than a prediction one

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

#9

Post by eliotho »

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
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