What if Iran closes the Strait of Hormuz?
Tail-risk bid: a real Hormuz closure prices a war premium straight into Brent (~20% of seaborne crude transits the strait), dragging diesel/jet and lifting breakevens while high-beta Nasdaq is sold into the VIX spike and risk-parity delever. Closest rhyme is the 2025 Twelve-Day War, where Brent spiked then round-tripped within weeks once the strait stayed open — actual closure has never happened, so the move is a regime-shift, not a headline pop. Skeptic's note: Iran exports ~1.5m bbl/d through the same water, so a full closure self-harms and rarely lasts.
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The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 0–6 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. Iran closes the Strait of Hormuz after a naval clash with US forces, choking ~20% of seaborne oil. The trigger decomposes into signed root‑shocks — Oil supply risk ▲ · Geopolitical risk ▲ — which propagate through our causal graph to the markets below.