Possible scenario
Hormuz Risk Escalates
20% Chance
A military or shipping incident around the Strait of Hormuz temporarily worsens the blockade and causes insurers and tanker owners to pull back from southern Iraqi loadings. This is less likely than containment, but the Iran war and recent 90% cut in Gulf exports make it a credible tail scenario.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- 10-year Treasury yield Down
- Oil prices Up
- US dollar Up
Secondary impacts
- Energy +3.0%
Portfolio impact
S&P 500-1.4%
Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.
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