Strait of Hormuz: A Citrini Field Trip

Introduction

CitriniResearch’s raison d’etre is taking complex topics of interest for investors and explaining them in a way that’s intuitive. That’s why our work spans so many asset classes, and it’s why sometimes we write in-depth sector primers, macroeconomic missives and, occasionally, hypothetical scenarios that result in us receiving death threats (only semi -credible ones).

Talking about something confusing is what gets us excited. It’s also where great investment ideas are born.

The situation in the Strait of Hormuz is nothing if not confusing right now. So, CitriniResearch sent our incredibly capable field analyst – dubbed Analyst #3 in order to avoid emotional attachment – on assignment to the Strait of Hormuz. Armed with a fluency in four languages including Arabic, a Pelican case full of equipment, a pack of Cuban cigars, $15,000 in cash and a roll of Zyn, #3 set out to fulfill the itinerary we’d planned in our Manhattan offices the week prior.

We figured we’d leave with an impression that was basically “The strait was closed or open.” We also were quite aware that the trip might be a flop and we would learn nothing at all. However, we came away with a much more nuanced understanding of the current environment and the transition to a multipolar world.

If David Foster Wallace were alive today, he’d be reporting from the bar in a beachside town on the Omani coast– taking notes on a napkin about the particular quality of silence in a hundred-room hotel with three guests, watching tankers drift towards, but never quite reach, the Strait of Hormuz. That’s our inspiration here, if DFW was also concerned with finding alpha.

This is a story about the most consequential place on Earth right now — the fifty-four-mile passage between Iran and Oman through which the global economy flows, or doesn’t. There was no shortage of alpha on the Strait, including concrete information on the new rules, being written as we speak, on how the Iranian Revolutionary Guard i…