Likelihood, two years: 3Possible; to end-2028
Likelihood, ten years: 4Likely; to end-2036
Systemic impact: 4Severe; global
National impact: 4Severe; typical highly exposed nation
Onset pace: Days
Duration (acute phase): 90 days (closure; the war lasts six months)
Warning time: Days (after months of visible tension)
Scope: Global
Recovery horizon: Years (traffic in months; facilities and stocks in years)
Capability load: Hard 2/3Soft 1/3Economic 3/3; domains loaded High
Concurrency: Standalone; triggers 9 · triggered by 4
Confidence · movement: medium; new

Rated at Standard Severe. Event reach: global event (Likelihood is for any theatre that meets the definition, not for a named strait.). Source of scores: model-panel-v0.5.

Load test: results by nation

03Narrative

Dateline: March 2031

The confrontation had been building for months, but the war itself began within a week. In early April 2030 an exchange of strikes between a regional state and a major power with forces in the Gulf became a sustained air, missile and naval campaign, and two partner states joined within days. War-risk underwriters withdrew standard cover for the strait on the third day. Owners held ships outside it, and transits fell from about a hundred a day to fewer than thirty, most of them under escort.

The closure lasted 90 days at that level. Missiles and drones damaged two export terminals, a gas liquefaction plant and a container port. Cyber operations interrupted port systems and a regional telecommunications operator for several days at a time, and satellite navigation was unreliable across the theatre. Crude oil reached twice its pre-war price in the fifth week. Spot gas reached four times its pre-war price in the eighth, when buyers in East Asia, South Asia and Europe were bidding for the same cargoes. War-risk premiums on the affected routes tripled.

Governments faced several tasks at once. Importing states released emergency stocks in the second week and introduced fuel allocation for industry in the fourth; several then found that their plans assumed a closure of 30 days. States with nationals in the region ran evacuations by air and sea while commercial flights were suspended, and neighbouring countries received displaced people in numbers their reception systems had not planned for. Allied governments were asked for ships, air defence interceptors and basing. Interceptors and precision munitions were used faster than they could be made. Reservists were recalled in the belligerent states and in two of their partners.

The economic effects reached beyond the energy importers. Fertiliser prices followed gas. Freight rates rose on routes far from the fighting as ships were rerouted and insurers repriced. Central banks tightened policy against inflation that came from supply, and finance ministries funded fuel subsidies and defence orders in the same budget. Low-income importers in Africa and South Asia cut fuel and food purchases as their currencies fell. Exporters outside the theatre earned more, and so did some defence manufacturers.

Neither side won quickly and neither used nuclear weapons. Large-scale operations continued until October 2030, when a ceasefire held. Mine clearance and the return of insurers and crews took longer: traffic through the strait recovered only in part over the following six months and had not returned to its pre-war level by March 2031. The damaged terminals were still under repair and emergency stocks were being rebuilt at higher prices. Munitions stocks were below their pre-war levels in every state that had fought or supplied.

The states that came through with least loss had more than one supply route, stocks sized for months, tested allocation and evacuation plans and forces able to sustain an escort commitment. The others had plans for a closure or for a war, but not for both together over six months.

The dateline is illustrative, not a forecast. The narrative is hypothetical; the historical anchors below are real events.

04Summary

A regional confrontation becomes six months of conventional warfare involving a major power and its partners. A globally important strait loses 70 per cent of normal commercial traffic for 90 days, followed by six months of partial recovery. Strikes and cyber operations damage nearby ports, energy facilities and communications. At the peak, oil prices are twice and gas prices four times their pre-war level, and war-risk insurance on affected routes triples. Nations must manage defence commitments, evacuation, displaced people and fuel rationing together. The test assumes neither rapid victory nor nuclear escalation. The Strait of Hormuz is the default theatre; other straits are variants.

05Historical anchors

Event	Date	What happened	Calibrates
Strait of Hormuz closure	28 February to July 2026	After strikes on Iran on 28 February, commercial shipping through the strait effectively halted from early March. War-risk premiums doubled and Brent rose above US$92 on 6 March. The first transits under a ceasefire took place on 8 April. On 2 July traffic stood at 34 transits a day against about 100 before the conflict.	The traffic loss, the insurance path and the recovery horizon: about five weeks of closure produced four months of disruption. This scenario extends the fighting to six months.
Closure of the Suez Canal	June 1967 to June 1975	Egypt closed the canal at the start of the June 1967 war and it stayed shut until 5 June 1975. Fifteen merchant ships were trapped inside it for the eight years. Traffic between Europe and Asia was rerouted around the Cape of Good Hope.	A war can close a sea route for far longer than the fighting lasts. Sets the upper bound on duration for the Standard Extreme setting and shows that trade adapts by rerouting at a cost.
Iran–Iraq tanker war	1984–1988	Iran and Iraq attacked merchant shipping in the Gulf over four years and several hundred vessels were hit. The strait was never closed. From July 1987 the United States Navy escorted reflagged Kuwaiti tankers.	Sustained warfare beside a strait without closure: the Standard Major setting, and the escort burden that falls on outside navies.
Russia's full-scale invasion of Ukraine	24 February 2022 onward	A major power began a conventional war that many expected to be short; it continued for years. Ukraine's Black Sea ports were closed to commercial shipping until a grain corridor opened in July 2022. More than 5 million people had left the country by late April 2022. Artillery and air defence munitions were used faster than supporting states produced them.	The assumption of no rapid victory, the speed and scale of displacement and the munitions and alliance load of a long conventional war.
Russian gas cut-off	2022	Russian pipeline gas deliveries to Europe fell sharply during 2022. The European benchmark gas price peaked near €340 per megawatt hour in August 2022, and European governments allocated hundreds of billions of euros to energy support.	The gas price multiple and the fiscal cost of household and industrial support. A fourfold rise is within what has been observed.
Lloyd's geopolitical conflict scenario	October 2024	Lloyd's modelled a conflict that closes major trade routes. The five-year global loss was US$14.5 trillion on a probability-weighted basis, within a range of US$7.8 trillion to US$50 trillion.	The systemic impact level: this scenario sits above the weighted case and below the extreme one.

06Parameters

Shown at their preset values. Parameters are not adjustable in this release and nothing on this page is computed from them. Custom settings run (Phase B) but are labelled 'non-standard run' and excluded from comparisons.

Common variables at Standard Severe · read-only

1. Severity: major
severe (Standard Severe)
extreme
2. Duration (acute phase): 30 days
90 days (Standard Severe)
1 year
3 years
5 years
Standard Severe: 90 days (closure; warfare for six months)
3. Onset pace: days (Standard Severe)
weeks
months
years
4. Warning time: none
days (Standard Severe)
months
Standard Severe: days (after months of visible tension)
5. Scope: national
regional
global (Standard Severe)
6. Origin: natural
accidental
adversarial (great power / neighbour / non-state) (Standard Severe)
negotiated
Standard Severe: adversarial (great power and partners)
7. External support: full
partial (Standard Severe)
none
8. Concurrency: standalone (Standard Severe)
plus one named scenario
plus two
9. Policy response assumed: none (pure exposure)
current plans executed (Standard Severe)
best practice
10. Recovery horizon: months
years (Standard Severe)
structural
Standard Severe: years (traffic in months; facilities and stocks in years)

Scenario-specific parameters · read-only

Parameter	Default	Range or options	Note
Theatre and strait	Strait of Hormuz and the Gulf	options: Taiwan Strait and Luzon Strait / Malacca / Bab el-Mandeb and Suez / Turkish Straits / Baltic approaches	The price path below is calibrated to the default. An East Asian theatre replaces part of the energy loss with a loss of semiconductor and manufactured goods supply.
Duration of conventional warfare	6	2 to 18	Large-scale operations involving a major power and its partners, ending in a ceasefire and not in a decisive result.
Loss of commercial traffic through the strait	70	40 to 100	Insurer withdrawal and owners' decisions account for most of the loss; a declared blockade is not required.
Duration of closure at that loss	90	30 to 365	Followed by six months of partial recovery (range 2 to 18 months) while mines are cleared and insurers and crews return.
Oil price at the peak	2	1.5 to 3	Carried over from the first-pass energy supply scenario.
Gas price at the peak	4	2 to 6	Spot LNG and the benchmarks that follow it. Contracted pipeline gas moves less.
War-risk insurance on affected routes	3	1.5 to 10	Where standard cover is withdrawn altogether, traffic depends on state-backed cover or escort.

07Transmission channels

1
Strikes begin and war-risk insurers withdraw cover. Commercial transits through the strait fall by 70 per cent within days.
2
Crude, LNG and refined product cargoes stop arriving. Oil prices double and gas prices rise fourfold at the peak, with physical shortages for direct importers.
3
Strikes and cyber operations damage ports, energy facilities and communications near the theatre, which extends the supply loss beyond the closure.
4
Belligerents and allies commit forces, interceptors and munitions faster than industry replaces them. Governments evacuate nationals and receive displaced people.
5
Freight and insurance costs rise on all routes. Fertiliser, petrochemical and component supplies tighten and food import costs rise.
6
Inflation, subsidies and defence spending widen deficits. Central banks tighten, and the currencies and sovereign spreads of import-dependent states come under pressure.
7
Importing governments ration fuel and release reserves. Public tolerance and alliance cohesion weaken as the war passes its third month.
8
After a ceasefire, mine clearance, repairs and the return of insurers and crews take six months. Stocks and munitions are rebuilt at higher cost.

08Capability loading

High: capability band shifts expected under current plans. Medium: band shifts under 'none' policy response only. Low: strain without band shift. Loads are judgement-based until the Atlas connects. Domains link to the Atlas.

Domain	Load	Channel
Hard
Defence and security	High	combat operations, alliance commitments, escort and mine clearance, munitions use above production, evacuation of nationals
Strategic infrastructure	High	strike and cyber damage to ports, energy facilities and communications; pipelines, storage and refining flexibility
Critical technology	Medium	navigation interference, cable damage, demand for drone and missile defence, interrupted component shipments
Soft
Government effectiveness	High	fuel rationing, reserve release, evacuation and reception of displaced people run concurrently
Human capital	Medium	casualties, displacement, reservists leaving the workforce, health systems receiving evacuees
Influence and cohesion	Medium	alliance cohesion, public consent for commitments and rationing, information operations, alignment of non-belligerents
Economic
Macro-financial	High	inflation, current account, subsidy and defence spending, sovereign spreads and currency pressure on importers
Industry, trade and supply	High	freight and insurance costs, rerouting delays, input shortages, loss of export access
Energy and resources	High	crude, LNG and refined product shortfalls; strategic stock drawdown; fertiliser feedstock prices

09Stakeholders

Government: Exposure
Alliance commitments, nationals in the theatre, import route concentration, reserve days and munitions stocks
Actions
Write fuel allocation plans for a 90-day closure followed by six months of partial recovery
Exercise evacuation, reception of displaced people and reserve release as concurrent tasks
Agree escort, basing and munitions-sharing arrangements with partners before a crisis
Watch
Force deployments and reserve call-ups in the theatre
Daily transits and maritime security incident reports
Emergency stock days and interceptor inventories
Technology: Exposure
Subsea cables, satellite navigation, regional data centres and component shipments routed through the theatre
Actions
Map cable routes, landing stations and suppliers that depend on the theatre
Secure backup power fuel and alternative routing for critical services
Prepare for navigation interference and state-linked cyber operations against port and energy systems
Watch
Satellite navigation interference reports
Cable faults and repair-ship availability
Diesel and component lead times
Investors: Exposure
Shipping, insurance, energy, airlines, defence producers and the sovereign debt of energy importers
Actions
Stress portfolios on doubled oil, fourfold gas and tripled war-risk premiums over nine months
Review war exclusions and accumulation across marine, aviation and political risk lines
Assess sovereign exposure to importers with low reserves and high fuel subsidy costs
Watch
War-risk premiums and changes to listed areas
Tanker and LNG freight rates
Sovereign spreads of energy importers
Public: Exposure
Fuel prices and availability, household energy bills, relatives in the region and reserve service
Actions
Follow official travel advice and register with consular services when in the region
Keep household preparedness in line with national guidance
Rely on official allocation notices and not on unverified reports
Watch
Travel advisories
Pump prices and rationing announcements
Reserve call-up notices

10Regional exposure

Region	Exposure	Rationale
North America	High	Alliance and partner commitments draw forces and munitions; net energy exports do not shield consumers from world prices.
Europe	High	LNG, jet fuel and diesel imports; trade with Asia through Suez; allied obligations and arrivals of displaced people.
China	High	The world's largest crude importer, supplied through Hormuz and Malacca; a belligerent in the East Asian variant.
Indo-Pacific	High	Japan, Korea and Taiwan import most of their energy by sea; ASEAN straits and allied bases are exposed.
South Asia	High	Crude and LNG imports and remittances from the Gulf depend on the theatre; fiscal buffers are thin.
Gulf and Middle East	High	Theatre of the default case: facilities struck, exports stopped, residents and migrant workers displaced.
Africa	Medium	Fuel, food and fertiliser import costs rise and East African freight is disrupted; some oil exporters gain.
Latin America and Caribbean	Medium	Distant from the fighting; importers pay more for fuel and fertiliser while oil and grain exporters gain.
Russia and Eurasia	High	Exporters gain on price, but Black Sea and Baltic variants place the region in the theatre and transit routes are disrupted.

11Early-warning indicators

Indicator	Source	Threshold
Daily commercial transits by strait	IMF PortWatch; Lloyd's List Intelligence	30 per cent below the 12-month average for seven days
Attacks on and seizures of merchant vessels	UK Maritime Trade Operations (UKMTO)	three or more incidents in 30 days in one theatre
War-risk listed areas and premium as a share of hull value	Lloyd's Market Association Joint War Committee	a new listed area, or premiums at twice the level of 90 days earlier
Brent crude and spot LNG benchmark prices	US Energy Information Administration; ICE	Brent 30 per cent above its 90-day average
Emergency oil stocks in days of net imports	International Energy Agency	below 90 days
Armed conflict events and cross-border strikes in the theatre	ACLED	a rise sustained over four weeks
Cross-border displacement from the theatre	UNHCR Operational Data Portal	—
Force deployments, reserve call-ups and advice to nationals to leave	—	departure advice issued by three or more governments

12Compounds

Triggers: S02 Global funding seizure · Energy-driven inflation, tighter policy and war spending raise sovereign spreads for importers
S06 Breadbasket failure · Fertiliser shortages and freight costs reduce the availability of staple imports
S01 Trade bloc rupture · Sanctions and export controls between the belligerents' partners harden into blocs
S04 Hybrid coercion · A belligerent extends cyber operations and sabotage to the infrastructure of supporting states
S09 Cryptographic trust break · A major power at war has the strongest reason to use or reveal a concealed capability.
S10 Severe pandemic · War and displacement remove surveillance and care, so an emerging pathogen spreads before detection.
S13 Great-power détente · A war that closes a sea route shows both powers the cost of unmanaged escalation
S14 Middle East settlement · A costly closure of a sea route forces the parties and guarantors to negotiate
S15 Clean power threshold · A fuel price shock accelerates the move away from imported hydrocarbons
Triggered by: S04 Hybrid coercion · A campaign below the threshold of war escalates into open warfare
S01 Trade bloc rupture · Division of trade into blocs removes the commercial restraint on confrontation
S05 Legitimacy rupture · A disputed transfer of power in a state beside the strait invites intervention
S06 Breadbasket failure · Disputes over shared rivers and scarce grain raise the risk of armed confrontation between neighbours; a contributing cause only.
An incident at sea or in the air between forces operating in close contactThe collapse of a ceasefire or of agreed limits on missile and nuclear activity in the region
Amplifying trends: Great-power competitionLong-range strike proliferationContested maritime accessEnergy import dependenceDefence industrial base & munitionsDrone & autonomous warfareAsylum & migration system strainStrategic stockpiles & reserves
Key trends: Contested maritime accessCritical Energy import dependenceCritical Commodity dependence & price volatilityVery high Strategic stockpiles & reservesVery high Long-range strike proliferationVery high Defence industrial base & munitionsVery high Military logistics complexityVery high Drone & autonomous warfareVery high Fossil fuel supply & refiningVery high
From GINC Trends: the trends rated Very high or Critical for this scenario, of 250. All S03 trend scores.

13Rating rationale

Rating	Band or level	Why
Likelihood, two years	3Possible	Deep closures have occurred, but the definition also requires six months of conventional warfare with a major power engaged and 90 days at a 70 per cent loss of traffic. The 2026 Hormuz episode came close on traffic; its fighting lasted weeks. Several theatres carry the risk independently, which holds the band at Possible and not Unlikely.
Likelihood, ten years	4Likely	Over ten years the test is whether any contested strait sees sustained warfare with a major power engaged. Disputes in the Gulf, the Taiwan Strait, the Red Sea and the Black Sea are unresolved, and long-range strike is now held by regional states and armed groups. Together they place the event in the Likely band. The six-month threshold keeps it below Highly likely.
Systemic impact	4Severe	Lloyd's range for a conflict that closes major trade routes runs from US$7.8 trillion to US$50 trillion over five years. A six-month war with a 90-day closure, doubled oil and fourfold gas sits above the weighted case and below the extreme one. Damage to export facilities and depleted stocks extend the loss beyond the closure.
National impact	4Severe	A typical highly exposed nation rations fuel, funds subsidies and defence together, evacuates nationals and receives displaced people. Security and essential services reach Severe. The level stops short of Catastrophic because the war is bounded: no nuclear use, a ceasefire at six months and a route that reopens. Belligerents and single-route importers may exceed it.
Confidence	medium	Traffic, price and insurance paths rest on observed closures in 2022 and 2026. The conduct and length of a war involving a major power, and the scale of displacement, are judgements.

Source of scores: model-panel-v0.5. Confidence refers to the rating, not the scenario. Calibration sources are listed with the anchors above and on the scenario methodology page.

14Open questions

Contested assumptions for the panel to resolve.

Whether one record can hold both a Gulf war and a Taiwan Strait war. The second involves two major powers directly and removes semiconductor supply, which the energy price path does not describe.
The specification gives no figure for displaced people, evacuated nationals or facility damage, so three of the loads rest on judgement and not on a stated parameter.
One panel member rated national impact at 5. Whether belligerents and single-route importers should be scored apart from the typical highly exposed nation.
How to treat energy exporters whose revenue stops because they are inside the theatre, as against exporters outside it that gain.

15Commentary

No signed commentary in this build.

16Version and citation

Version: 0.5.0 · active · regional-war-spillover
Change log: 0.5.0 · 9 October 2026 · Rebuilt in the second pass from Maritime chokepoint closure: the event is now a six-month regional war involving a major power, with the strait closure and the price path of the first-pass Energy supply shock inside it. Likelihood bands lowered from 4 and 5 to 3 and 4, and national impact from 5 to 4.
Full change log

Rating history

One row per edition. Each edition page is frozen at release; corrections are published as errata.

Edition	Rank	L2y	L10y	Systemic	National	Confidence	Edition view
2027	3	3Possible	4Likely	4Severe	4Severe	medium	Open

Versions

Version	Date	Change
0.5.0	9 October 2026	Rebuilt in the second pass from Maritime chokepoint closure: the event is now a six-month regional war involving a major power, with the strait closure and the price path of the first-pass Energy supply shock inside it. Likelihood bands lowered from 4 and 5 to 3 and 4, and national impact from 5 to 4.

Citation and downloads

Cite as

GINC (2027). Scenario S03 A regional war closes a globally important sea route, Scenario Library v0.5. scenarios.ginc.org/scenarios/regional-war-spillover

Content and data are published under CC BY 4.0.

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