Hormuz and the limits of the index.

What market indices can tell you, and what they cannot.

The UNCTAD Strait of Hormuz Dashboard, launched 28 April 2026, aggregates the market signal clearly. The Baltic Dirty Tanker Index stands at 2,795, against a 2024 average of 1,091. VLSFO bunker in Singapore has risen from a 2024 average of $571 per tonne to $1,076. Brent crude has traded above $120 on intraday peaks. These are the right numbers to watch. They confirm severity. They do not distribute it.

An accumulation underwriter pricing a P&I book, a crude desk managing a supply position, or a lender stress-testing a fleet facility needs something the index cannot provide: which specific counterparties carry Hormuz exposure, for which commodity, at what percentage of their total seaborne supply, and whether any rerouting option exists at all. Aggregate indices are inputs to that question. Run it through The Narrows and you get the answer.

The first thing The Narrows establishes is that Hormuz is not one risk. It is two fundamentally different risks sharing a geography. For crude petroleum, a disruption creates a painful, calculable rerouting problem. For LNG, it creates something categorically different: a supply halt with no commercial solution at any price.

Who is exposed, for what commodity, and whether any alternative exists.

The Narrows model produces bilateral dependency figures at the (importer, chokepoint, commodity) level. The table below shows Hormuz dependency for LNG and crude separately, because the rerouting column means something fundamentally different for each. These figures are drawn from 2023 UN Comtrade bilateral data and represent the structural dependency pattern, not live cargo positions.

What continuation costs, by commodity, for specific importers.

The Narrows model translates disruption severity into bilateral cost for specific counterparties across time horizons and toll scenarios. Japan is the primary example because it carries the highest absolute Hormuz exposure of any single importer across both LNG and crude petroleum. The figures are calculated separately by commodity, because the cost structures are not comparable.

For crude, rerouting costs are recalculated at current market rates: VLSFO at $1,076 per tonne and charter rates consistent with BDTI 2,795. These are approximately 1.9x and 2.5x their 2024 baselines. For LNG, there are no rerouting costs to calculate. The VaR figures represent supply that cannot move, not supply that moves at a premium.

What each vessel class can do, and what it costs.

The vessel cards below make the commodity distinction concrete. The VLCC (crude) card shows a painful but solvable rerouting problem. The LNG carrier card shows something categorically different. The Capesize card applies to Gulf-origin bulk cargo such as fertiliser and grain, where the Cape alternative also exists at cost.

LNG is the IMO bridge fuel. The bridge runs through Hormuz.

IMO's revised GHG Strategy targets net-zero emissions from international shipping by 2050. Carbon Intensity Indicator regulations, effective from 2023, have pushed operators toward LNG as the primary compliant fuel available at scale for deep-sea voyages. LNG-fuelled vessels now represent over 40% of new deep-sea tonnage ordered. This energy transition creates a second-order Hormuz dependency that is not visible in the standard exposure model.

As the global fleet converts to LNG propulsion, the nature of Hormuz exposure changes. It is no longer only a cargo risk for energy-importing nations. It becomes a propulsion risk for the fleet itself. A sustained Hormuz disruption simultaneously reduces LNG cargo supply and restricts the fuel supply for vessels designed to run on LNG. The ships most affected by cargo disruption are increasingly the same ships that require LNG to operate.

What The Narrows adds that market data cannot provide.

The UNCTAD Hormuz Dashboard provides a clear real-time read on market-level disruption. The Narrows model operates at a different analytical layer: bilateral, commodity-specific, and scenario-driven. The dashboard tells you the aggregate signal. The Narrows tells you which counterparty carries which exposure, at what percentage of supply, and whether any rerouting option exists at all for that specific commodity.

The model assumptions are substitutable. Charter rates, bunker prices, disruption duration, and toll level are all variable inputs. Replace the default vessel-class rates with your own book rates and rerun the exposure calculation. This is the capability that aggregate market data, however current, cannot replicate. Run your Hormuz exposure through The Narrows before you price it.