Actionable insights — Red Sea Reality Check
The repeatable analysis behind the call: not what he bought, but how he reads the oil-supply picture — written so the process can be rerun on the next Mideast headline.
How to read this page: each insight is a method — the data to pull and the question to ask when a Mideast "all-clear" headline hits. The boxed line shows how it played out in this post.
1. Don't trust "Hormuz reopening" headlines — gauge real normalization by chokepoint transit counts
The repeatable method
- When a peace-deal / "supply is back" oil narrative takes hold, identify every chokepoint in the affected supply route, not just the headline one. The Mideast crude/shipping picture runs through Hormuz and the Red Sea corridor (Suez to the north, Bab el-Mandeb to the south).
- Pull the actual transit counts for each chokepoint (GSA data) and compare them to a clean pre-disruption baseline (here: pre-2023, before the Houthi attacks on Red Sea shipping).
- If any major chokepoint is still running far below baseline while the market prices an all-clear, the "reopening" is incomplete — the supply impairment, and the price risk, persists.
- Fade the euphoria: a route that is only one-chokepoint-better is not normalized.
Here: markets cheered an Iran peace treaty as Hormuz returning to pre-war traffic, but Suez + Bab el-Mandeb transits were still ~50% below their pre-2023 levels — so the all-clear was premature and crude-supply risk remained.
Watch for
- GSA Suez Canal and Bab el-Mandeb transit counts climbing back toward (or staying well below) their pre-2023 baseline; a "peace" headline that moves only one chokepoint.
2. Treat Mideast cease-fires as on/off, not durable — stack the escalation drivers
The repeatable method
- Map the recent cease-fire history of the theater before assuming a truce holds. A pattern of re-escalation → truce → re-escalation means the next truce is also likely temporary, producing only "minor blips" in normalized activity.
- Assess the actors' incentives: if a state (Iran) has both a grievance (uranium-enrichment denial) and a proven lever (disrupting energy flows / harassing tankers), expect continued belligerence rather than de-escalation.
- Stack other supply-side escalators onto the same view (here: Ukraine's increasingly effective drone strikes on Russian oil & gas facilities) — multiple independent disruptions compound the price case.
- Conclusion drives positioning: a persistent supply impairment supports being long crude / energy-recovery names rather than chasing the ceasefire-relief sell-off.
Here: the cease-fire that began last May went off (re-escalation July), on (truce October), off (March blockade under Operation Epic Fury) — so Haymaker expects "another resounding rally by crude prices" and teased several energy-sector recovery plays for the next POW!.
Watch for
- Cease-fire announcements following a prior on/off pattern; energy-flow leverage (tanker harassment, refinery/facility drone strikes) that gives a belligerent actor reason to re-escalate.
Methods distilled from the Haymaker Substack post (text in transcript.txt) for personal study. Not investment advice. © Haymaker / David Hay for source material.