I believe some of you might have seen a reel wherein a group of tourists are having breakfast in scenic mountains, and some snow begins to move. For the first few seconds, either the tourists ignored it nonchalantly or tried to take photographs of a memorable moment, only to realise a few moments later that an avalanche had hit them and theres no exit. The only chance to save themselves was a few seconds earlier. Something similar is happening in our markets and though I am not a doomsday prophet, I believe that the markets globally are still busy taking pictures of a scenic moment.
If you have read my earlier blogs, I had talked about three different bears trying to destabilize the markets globally. The first being the absurd valuations AI related stocks have attained which took us to the 1999-2000 dot com crisis. The second was the private credit flowing into the AI related play which was showing stress on the Private Equity books leading to a subprime mortgage type situation, reminiscent of the 2008 Global Financial Crisis. The third was the price of oil and supply shock of gas which had hit us due to the US-Iran war which took us to the 1973 crisis. (https://zerotomillion.business.blog/2026/01/15/sell-regret-and-get-rich/ ; https://zerotomillion.business.blog/2026/01/26/sell-regret-and-get-rich-episode-2/ ; https://zerotomillion.business.blog/2026/02/24/winter-is-coming/ ; https://zerotomillion.business.blog/2026/03/07/oil-on-the-boil/ )
I also wrote that for the very first time in the history of markets, all three independent variables are working in collusion and even if the war ends in a huff, the damage it would do would be sufficient to help the other two existing bears wreak havoc globally. That was almost three weeks ago. So what are we seeing now!
1. The clock is Ticking- As we speak, the world is waking up to the geography of oil and gas supply chains. The gas crisis is real and is felt across East Asia with petrol pumps running dry in Australia to an energy emergence in Philippines to the Koreans asking people to shower a bit faster and Japan releasing the massive Strategic Petroleum reserves, etc. India is juggling an endless treadmill of diplomacy to escort gas tankers through the Strait of Hormuz which is giving a breathing space for one additional day at a time but the clock is ticking.
With the destruction of oil infrastructure in the Gulf and closure of the Strait, there are a number of ships stranded in the gulf, waiting to cross the strait, as and when an opportunity arrives.
A rough calculation told us that every tanker which had left the Strait before the closure on March 5, 2026 has already reached its destination in Asia as per journey time of 3-4 days to India to upto 20-25 days to Japan. Now if the Strait opens today, it will take around 5-7 days for all existing vessels to cross it and will then take additional journey time depending on the destination.
If we assume that in an ideal situation, the moment Strait opens up fully, every ship moves out immediately, the production resumes immediately and other ships begin their journey towards the gulf for future loading, it will take at least one week for the fresh ships to reach various ports in the GCC and loading of oil cargo from onshore storage facilities. They will then take their respective journey times to reach their destinations across Asia and other parts of the world.
So if you look at the timeline, there would be a period when existing ships would have reached their destination and fresh ships are on their way but no ship is arriving anywhere due to the lag in journey time. This is a void nothing can fill in global supply chain. This may be a few days to any number of days the war continues.
Now once the war ends and everything opens, the fresh ships will first load existing oil stored onshore at various ports which amounts to roughly 20 days to supply. Unless the storage capacity frees up, no country can resume their production for lack of storage and thus, for a few more day, a second void will hit the global supply chain which will cause a period where no ship containing oil and gas is arriving at any port anywhere in the world. That is the second void the world will have to witness.
Here is part of our analysis which I worked out with Claude:
The Eight Variables
Symbol
Value
Name
Meaning
Day 0
March 5, 20206
Clock start
The last significant convoy of loaded tankers cleared the Strait of Hormuz. From this point, no new cargo enters the global ocean pipeline from the Gulf.
T₀
Variable
Strait reopening date
The day on which the Strait formally reopens to commercial shipping. Three scenarios are tested: March 25, April 1, and April 7. Every downstream date is calculated from T₀.
X
4 days
Backlog clearance
Approximately 330 tankers were immobilised inside the Gulf and a further 400 were anchored in the Gulf of Oman. Under ideal conditions, 4 days are needed to sequence them all out of the Strait safely.
Y
1.5 days
New ships enter and berth
Empty tankers waiting near Hormuz navigate in and berth at Gulf loading terminals. Time from gate-open to first new ship berthed and ready to load.
Zₗ
3.5 days
Load one ship
Time to fill a single Very Large Crude Carrier (~2 million barrels) from existing coastal storage tanks. Multiple berths operate in parallel, so this is the per-berth loading time.
C
20 days
Coastal storage duration
Gulf coastal terminals held 60–90 million barrels of pre-filled oil at the time of closure. At normal export rates this inventory sustains approximately 20 days of continuous loading before meaningful depletion.
K
6 days
Upstream production restart
After coastal tanks drain, oil wells, pipelines, and gathering systems require approximately 6 days to safely restart and pump fresh crude to the coast. During this window, tanks cannot be refilled fast enough to load ships.
J
4–17 days
Journey time (port-specific)
Days for a loaded tanker to sail from the Strait to its destination at 14 knots: Mumbai 4d • Vizag 6d • Singapore 8d • Shanghai 13d • Seoul 15d • Tokyo 17d. J shifts calendar dates but does not change phase durations.
The Seven Phases of the Supply Shock
From Day 0 onwards, every destination port passes through the same seven phases in the same sequence.
Phase
Name
Duration
What is happening
1
Pre-war ships arrive
Day 0 → Day J
The tankers that loaded in the Gulf before March 5 are already at sea and still arriving normally. This in-transit buffer lasts exactly J days — 4 days for Mumbai, 17 days for Tokyo. Once the last of these ships docks, supply at that port drops to zero.
2
Main void
Day J → T₀+J
Complete blackout. The pre-war ships have finished arriving. The backlogged ships have not yet cleared the Strait. Ports receive nothing. Nations draw on strategic petroleum reserves. This phase grows longer by exactly one day for every day the Strait stays closed.
3
Stranded ships arrive
T₀+J to T₀+X+J (4 days)
The roughly 730 tankers trapped inside the Gulf and in the Gulf of Oman finally transit the Strait and deliver over 4 days. This is not fresh supply — it is oil that was already loaded and stuck in traffic. The jam clears; the factory has not yet reopened.
4
5-day mini-void
T₀+X+J (5 days)
After the last stranded ship departs the Gulf (T₀+4 days), new empty tankers need 1.5 days to enter and berth, then 3.5 days to load from coastal storage. For exactly 5 days nothing departs the Gulf. This hits every destination 5 days after the stranded ships finish delivering.
5
Coastal storage supply
T₀+9+J (20 days)
Gulf terminal storage tanks, filled to capacity before the war, supply a continuous stream of ships for approximately 20 days. This is genuine, meaningful relief. Oil flows. But these tanks are finite. Once depleted, they trigger the most severe phase of the crisis.
6
MAX DISTRESS — 2nd void
T₀+29+J (6 days)
Coastal tanks run dry. Upstream oil wells are restarting but cannot yet deliver crude to the coast fast enough to fill ships. For exactly 6 days absolutely nothing departs the Gulf. This is the worst supply void of the entire crisis and cannot be shortened by any diplomatic or logistical intervention.
7
Full restoration
T₀+35+J onwards
The first freshly produced oil completes its full journey from wellhead to destination port. Normal supply resumes. This is the earliest possible date for genuine, self-sustaining normalisation under ideal conditions.
Why two voids and not one: The gap between Phase 4 and Phase 6 exists because Gulf coastal storage tanks held 60–90 million barrels of pre-filled oil. When the Strait reopens, new ships immediately start loading from this existing inventory — providing 20 days of genuine supply. But once those tanks drain, ships have nothing to load until upstream oil fields have had 6 days to restart and refill the coast. That restart lag is Phase 6: unavoidable and uncompressible.
2. Inflation is here to stay:
The global markets are still pricing a soft landing and a transient inflation which means that the Fed will cut rates in 2026 and there will be a soft landing without major disruption. The price of oil and supply shock has thrown that out of the window two weeks back. Every major global voice, from Modi ji to Putin to energy experts across all asset classes agree that the supply shock is much bigger than the 1973 Arab oil embargo which brought the US to its knees through a decade long stagflation- high inflation and low to negative growth and the US markets fell 48% from their peak in 1973 and the returns over the next 10 years were so bad that the media was writing about the “Death of Equities” in 1979! (https://ritholtz.com/1979/08/the-death-of-equities/)
Funnily, the markets are hardly down 10% in the US and even in India, they are down less than 15% down. Now here is something I want you to ask Claude/ Gemini when you read this article- Consider everything which has already happened in the global markets beginning January 1, 2026 beginning with Venezuela, Silver and Gold attaining massive heights before collapsing like a pack of cards and swinging like small cap stocks, bitcoin down 50% from peak, Leading PE players gating redemptions across their private credit funds and crisis building therein, US-Iran war now on day 30th with multiple GCC countries nursing their wounds across oil and gas infrastructure, gas crisis a reality across East Asian countries, brent oil price above $110 despite multiple Trump TACO moments. Can you explain to me how much the markets should be down in any normal year only to price in what has already occurred by considering how markets have behaved over the past 100 years under similar situations.
The reason alone is sufficient to scare any reasonable person to not listen to the idiots on TV who are claiming a bottom with every 500 points rally on Nifty.
3. The baseline Analysis
I have been maintaining that in a normal scenario, a 40% drawdown on Nifty is a highly like scenario. With what has happened over the past two weeks, I will be glad if the markets only fall 40% and no more because historically, in any severe correction barring Covid, the US markets fall atleast 48% from All Time Highs and Indian markets invariably fall more. So if by the end of this year, we have Nifty at 16000 and doesn’t fall further, Gods will have been mighty pleased with India.
That aside, the current bear market which has technically not even started ( a bear market starts with 20% drop from ATH which is around 21000) is not going to be like Covid when everything fell quickly and we recovered and made a fresh high in 2020 itself.
Most investors, including myself have never seen a market when the indices fall 20%, recover 10% and people call bottom, it falls again and people lose money only for it to recover and new set of people calling bottom before all hell breaks lose and everyone loses their shirts. Be prepared for a very painful 2026 and even considering the speed at which markets move in today’s world, a six-eight month downward journey to sub 16K Nifty is underway.
4. What gets hurt the most:
The PM of the country stood before the Parliament twice in two days and invoked Covid times. The next day, Government sacrificed excise duty on fuel to save consumers which basically mean that the government fiscal side is under severe strain and the capital expenditure will shrink. Add to that a falling Rupee making imports dearer bringing inflation and declining Forex Reserves due to the pressure on the RBI to cushion the fall. The macro picture has turned outright ugly.
In such a scenario, the market darlings- power, PLI, infrastructure players which depended largely on government orders will suffer the most. Please go back and see the 2008 Nifty names such as JP Associates, Rcom, RInfra, Suzlon which all went to bankruptcy once the tide turned.
Also, companies with leveraged balance sheets/ low margin will suffer once the cost of capital rises and the new age players with funny accounting will all be caught naked. You can not run a loss making business in a high interest rate scenario.
Once the Global Central Banks begin to raise interest rates almost in a panic struck environment, the private credit stress will move from Private Equity books to Wall Street and everyone from Jamie Dimon to Larry Fink has seen how this unfolded in 2008 and I am sure the full blown crisis will then unfold.
5. If I can give you a pictorial analogy, please go and watch The Big Short. Go to the moment when the Shorts are calling the Banks as to why their prices aren’t moving favorably and then they realise that unless the Banks build a substantial short position of their own, it won’t budge. And once that happens, to which we are very close, its Armageddon. And if you want to ask me what to do, go watch that famous clip from the movie Margin Call when the boss says- sell it all before the world knows that we are selling.
Life is all about Compounding! 