Hours of research in the past months (on a oil company) i can finally capitalize on due to the Iran situation. Inviting new perspectives

I haven’t had the time to post my California Resources Corp analysis. But given the current situation, i thought i’d share some findings and thoughts:

Latest update: As of 2 March 2026

Iranian supreme leader ali khamenei and family has been assassinated by the US and Israel. Because of this, the straits of Hormuz is now officially experiencing a de facto closure. Iran’s Islamic Revolutionary Guard Corps (IRGC) has reportedly issued VHF radio broadcasts to vessels stating that "no ship is allowed to pass". Vessel tracking data shows a significant drop in traffic—estimated at roughly 70%—with many tankers either turning back or dropping anchor outside the waterway. Maritime insurers have effectively withdrawn coverage or raised premiums to six-year highs, making transit economically unviable for most private operators. This is extremely important because the strait is a critical chokepoint for roughly 20% of the world's oil and 25% of its liquefied natural gas (LNG). Brent crude is expected to open sharply higher, with some analysts predicting a spike into the $85–$90 range or even as high as $120–$150. This is not only due to the closure of the straits of Hormuz but also situations such as:

• Saudi Arabia's largest refinery, Ras Tanura (550,000 b/d capacity), was forced to temporarily shut down today following an Iranian drone strike that caused a fire.
• Beyond oil, major UAE logistics hubs like Dubai International Airport have gone offline due to the conflict, further complicating regional energy operations.

Saudi Arabia is attempting to bypass the Strait by routing crude through the East-West Pipeline to the Red Sea, which has a capacity of about 5 million b/d. The UAE is using the Habshan-Fujairah pipeline (1.5–1.8 million b/d capacity) to move oil to the Gulf of Oman. These pipelines can only handle a fraction of the region's total output. Combined, they offset less than 20% of the volume lost if the Strait remains fully impassable. In order to resolve this, supply from other routes have to increase. Some solutions include:

1. Strategic Reserve Policy — The U.S. currently holds approximately 415 million barrels in the SPR as a backup for more severe or prolonged emergencies. However, the U.S. government is currently not considering a release from the Strategic Petroleum Reserve (SPR).
2. Domestic Production Hedge — The U.S. is currently the world's largest oil producer, pumping roughly 13.5 million barrels per day. Prolonged high prices are expected to eventually trigger an increase in U.S. drilling activity, though this supply will take months (3 to 9 months) to reach the market

HOWEVER, California Resources Corp (NYSE: CRC) will profit immensely from the current situation in two ways:

• Price Escalators: Most of their existing contracts are tied to Brent or Alaska North Slope (ANS) pricing. As the Hormuz crisis drives global prices up, the revenue CRC receives from its current clients increases automatically.
• Increased Domestic Leverage: With foreign imports blocked, California refiners are now entirely dependent on local crude and whatever can be shipped from Alaska. This gives CRC massive negotiating power when current contracts come up for renewal.
• MASSIVE Proved developed reserves ready to release: Since CRC has a massive volume of Proved Developed reserves compared to any of its competitors (meaning the wells are already drilled and the infrastructure is built), they don't have to spend massive amounts of "new" money to keep making a profit. California refineries (like those owned by Marathon, Valero, and P66) are configured for specific types of oil. Previously, they imported roughly 50% of their oil from overseas. With the Strait of Hormuz closed, those refiners are panicking. They cannot easily get oil from Texas (due to the lack of pipelines). This turns CRC’s reserves into the "only game in town." CRC isn't just benefiting from the global Brent price increase; they are benefiting from a localized shortage that could drive California crude prices even higher than global benchmarks.

I don’t like timing plays, but this situation is too favourable to not make a move. A big one. Anyone has got a different perspective?