Onyx Future of Energy Trading Research
A competition research submission and post-event reconstruction of how the US–Iran conflict moved through Hormuz shipping risk, Gulf oil flows, product markets and energy-security policy.
Submitted — No public ranking was issued
- Causal research
- Oil markets
- Source ledgers
- Event chronology
Quick summary
- Role
- Sole author.
- Problem
- Trace how geopolitical action propagated through shipping risk, insurance, physical oil flows, product constraints and market expression.
- What I built
- A research note, event/claim ledgers, evidence cutoffs and a public-safe post-event reconstruction.
- Best evidence
- A complete submitted research package and reproducible public archive.
- Main limitation
- No public ranking was issued.
- Repository / report
- View repositoryRead the research note
Outcome: Submitted. No public ranking was issued.
The portfolio reports only publicly citable outcome wording. No entrant ranking, shortlist or prize claim is asserted for this submission.
Onyx Capital Group asked entrants to evaluate the short- and long-term consequences of the US–Iran conflict for the oil market. The written response could be either a research paper or a trade idea, but it was limited to 1,000 words and had to be accompanied by a video of no more than two minutes.
I used the submission to test a narrower claim:
The market was pricing not only whether Gulf barrels existed, but whether those barrels could be insured, loaded, transported through the Strait of Hormuz and delivered to the refinery that needed them.
That distinction became the centre of the project. A barrel at a production site is not the same economic object as a barrel delivered on time. Route security, war-risk cover, tanker availability, freight, refinery compatibility and product inventories can all separate physical production from usable supply.
The competition brief
The official research question was:
Evaluate the short and long-term consequences of the recent US–Iran conflict on the oil market.
The competition imposed three useful constraints:
- no more than 1,000 written words;
- a research paper or trade-idea format;
- a video presentation of up to two minutes.
The deadline was 13 July 2026. The related Future of Energy Trading event took place on 23 July.
Those limits forced the submission to make one mechanism explicit rather than attempting to summarise the entire conflict. I focused on Hormuz as both a physical chokepoint and a commercial decision system.
The research question
The working question became:
Which political decisions and physical constraints created the Hormuz risk premium, through which markets did that premium travel, and what observable sequence would cause it to persist or reverse?
This formulation was more useful than asking whether oil would rise.
Flat crude prices combine several forces:
- realised supply loss;
- expected future disruption;
- precautionary inventory demand;
- freight and insurance;
- refinery outages;
- product scarcity;
- emergency-stock policy;
- non-Gulf supply;
- global demand;
- currency movements;
- positioning and risk appetite.
A geopolitical headline can therefore raise oil before a barrel is lost. The benchmark can later fall even while shipping remains impaired if demand fears, policy intervention or expectations of de-escalation dominate that session.
What I submitted
The competition entry consisted of:
- a research paper of no more than 1,000 words;
- an accompanying two-minute video;
- a conditional market thesis rather than an unconditional Brent target;
- observable triggers for confirmation and invalidation.
The submitted argument was that the immediate shock should be monitored first through delivery conditions:
- insurance availability and exclusions;
- war-risk premiums;
- tanker behaviour;
- freight;
- vessel traffic;
- nearby crude structure;
- regional differentials;
- refinery throughput;
- diesel and jet cracks;
- inventories.
The submission favoured those mechanism-specific indicators over treating every movement in Brent as direct evidence of physical scarcity.
Research architecture
The project separated the market problem into four layers:
-
Political action
Military decisions, sanctions, licences, diplomatic agreements and public threats. -
Commercial transmission
Underwriter terms, owner decisions, chartering, freight, financing and route choice. -
Physical transmission
Tanker traffic, storage constraints, shut-in production, refinery runs, inventories and product availability. -
Market expression
Flat price, time spreads, regional differentials, freight, product cracks, volatility and macroeconomic spillovers.
The point of the chain is not that every arrow can be identified perfectly. It is that each arrow can fail independently.
A political reopening does not guarantee ordinary insurance. Restored insurance does not instantly reposition tankers. More crude exports do not guarantee normal refinery throughput. Lower Brent does not prove that product inventories or delivery reliability have recovered.
Evidence states
The final public work uses four evidence states:
| Evidence state | Meaning |
|---|---|
| Pre-submission | Known before the competition paper was drafted |
| Submission record | Known by the 13 July cutoff and eligible to support the original argument |
| Post-submission | Observed after the deadline and used only to test the thesis |
| Current reconstruction | Public evidence available through 1 August 2026 |
This boundary prevents hindsight from being written as foresight.
The original paper and video are evidence of what I argued. Later IEA, EIA and shipping evidence can show whether the mechanism survived. They cannot be inserted retrospectively into the submission record.
Structural exposure
Before the conflict, Hormuz was already a concentrated dependency.
EIA estimated that 20.9 million barrels per day of oil passed through the strait in the first half of 2025. That was approximately one fifth of global petroleum-liquids consumption and one quarter of maritime-traded oil. EIA also estimated that 11.4 Bcf/d of LNG moved through the route, more than one fifth of global LNG trade.
The available bypasses were useful but incomplete. EIA estimated that Saudi Arabia’s East–West pipeline and the UAE’s Abu Dhabi pipeline could together provide around 4.7 million b/d of capacity outside the strait. That reduced the scale of the constraint without replacing the normal route.
This was the central asymmetry: ordinary Hormuz oil flow far exceeded immediately available bypass capacity.
The system was efficient because a large volume used one route. It was vulnerable for the same reason.
What the reconstruction found
The post-event evidence strengthened some parts of the submission and weakened others.
Delivery reliability remained part of supply
The later record supported the distinction between production and delivered supply.
Shipping could be legally permitted but commercially unattractive. Cover could remain available but at terms that changed voyage economics. Tankers could pass individually without restoring ordinary traffic. A producer could have oil but lack storage or export capacity. A buyer could obtain crude but still face product shortages because refinery throughput recovered more slowly.
Crude and products recovered at different speeds
The IEA’s July report described a sharp recovery in June oil flows, but not a complete normalisation.
Global oil supply rose by 4.1 million b/d in June to 98.8 million b/d, while remaining 9.4 million b/d below pre-war levels. Gulf exports reached 16.1 million b/d, compared with roughly 24 million b/d before the conflict.
Crude recovered faster than refined products and LPG. Product cracks and refinery margins reached four-year highs while important Gulf export refineries remained constrained.
That split was more informative than flat crude alone. It showed that a better-supplied crude market could coexist with tight diesel, jet fuel and LPG markets.
Commercial decisions transmitted state risk
Reuters reported indicative hull war-risk premiums around 3% in early March, compared with roughly 0.25% before the conflict.
On a notional $250 million tanker, 3% is around $7.5 million before cargo cover, financing, delay and freight.
The arithmetic was not the whole mechanism. The more important question was whether cover was available on terms compatible with the owner’s financing, charter obligations and risk limits.
Price and physical repair moved on different clocks
Late-July price moves illustrated the problem with reading one benchmark as the complete state of the system.
Brent settled at $84.09 on 28 July after several days without new strikes, rose to $90.74 on 29 July after renewed escalation and settled at $90.12 on 31 July.
Those observations describe changing beliefs. They do not identify one causal coefficient.
On 31 July, two laden VLCCs exited Hormuz while overall traffic remained sparse. The ships were evidence of partial transit, not evidence of ordinary commercial normality.
What changed after the submission
The reconstruction made four major changes to my original framework.
First, I replaced the phrase route risk with an explicit sequence of state action, insurance, owner behaviour, flows, refinery constraints and market response.
Second, I separated six forms of power:
- resource power;
- route power;
- network power;
- buffer power;
- market power;
- adaptation capacity.
Third, I removed an earlier weighted route-risk score. The score compressed disagreement between shipping, products and flat price into a false single state.
Fourth, I replaced indicative price brackets with conditional update rules. The public inputs did not support precise scenario prices.
Outcome
The submission was completed and entered by the 13 July deadline.
I do not have a public entrant ranking that can be cited for my submission. The portfolio therefore reports the outcome conservatively:
Submitted. No public ranking was issued.
The absence of a public ranking does not change the value of the project. The competition produced:
- a completed market-research submission;
- a public post-event reconstruction;
- a reusable geopolitical-research method;
- a structured evidence-state system;
- a claim ledger;
- a causal transmission diagram;
- a scenario and invalidation framework.
Limitations
This work does not establish clean causal identification of every market move.
Public AIS data can be incomplete because vessels disable or lose transponder visibility. Public insurance figures are indicative rather than a transaction-level panel. Product and freight datasets are uneven. Government and commercial estimates can use different definitions and update schedules.
The actor analysis also separates stated objectives from inferred objectives. Public actions and constraints can support an inference about strategy, but they do not reveal private intent directly.
The correct response to those limitations is not false precision. It is a dated record, explicit alternative explanations and observable update rules.
Related writing
The Strait Is the Price is the full post-event reconstruction. It examines the market mechanism, the distribution of power across states and commercial actors, the split between crude and products, and the observations that would invalidate the persistent-disruption thesis.
From Geopolitical Event to Testable Market Thesis extracts the reusable method: evidence cutoffs, actor ledgers, event classes, causal arrows, rival explanations, market selection, update rules and reproducibility.