Prof. Steve Hanke, the economist behind the Johns Hopkins Institute for Applied Economics, broke down why the Strait of Hormuz closure isn't showing up where it should.
He ran a joint-probability exercise live: Iran losing control of the Strait, Hezbollah disarmed, Hamas eliminated, the Houthis disarmed, Israel retreating to its 1967 lines. Give each a generous 20% chance.
Multiply them together and you get 0.032%. Virtually zero odds of regional peace, under any reasonable numbers you plug in.
"You have virtually no chance, zero chance, that things are going to work out and you'll have peace in the region."
Yet the futures curve barely shows backwardation. Spot and December 2026 crude are separated by pennies. Hanke's read: markets are asleep at the wheel, and Russian refining capacity, quietly knocked offline, may be masking the real supply shock.
So why are prices this calm when the math says otherwise?
@steve_hanke
