GITT: Week 13 – The Constraint Layer Takes Control

This update follows the GITT framework and the Week 12 reading, where Energy cooled, Inputs remained sticky, PMI Input Costs rose, and the Constraint Index stayed elevated above the Inputs layer.

Week 13 delivered the test we were watching. Energy continued to fall, helped by peace and ceasefire expectations around the Middle East and Hormuz. At the same time, the framework is being refined with a direct sulfur-market series, replacing the earlier proxy Sulfur Index. This matters materially. With direct sulfur now included, the Constraint Index moves decisively above the Energy layer.

The message is straightforward: the original energy shock is cooling, but the system has not normalized. The pressure has moved deeper into the physical-constraint layer.

I. W13 Data Update

All values remain indexed to 100 = February 2026 average.

Week 1 = March 1 – March 7.
Week 13 = May 23 – May 29.

Market-based indicators are updated using weekly averages, while official and macroeconomic indicators are updated only when new releases become available. The W13 values below are based on near-final weekly readings and should be treated as preliminary until the full weekly close is locked.

Energy Layer

Metric	Region	W0	W3	W5	W7	W8	W9	W10	W11	W12	W13
WTI Crude Oil (S)	Global	100	124	154	148	150	164	154	157	150	140
Gasoline (S)	US	100	116	140	134	138	151	144	144	136	128
Diesel (S)	US	100	118	171	151	158	166	156	156	150	143
Natural Gas (TTF) (S)	Europe	100	152	188	155	162	165	143	150	145	142
LNG (JKM) (S)	Asia	100	136	191	145	152	155	155	156	156	153

Inputs Layer

Metric	W0	W3	W5	W7	W8	W9	W10	W11	W12	W13
Fertilizer Index (B)	100	103	104	108	111	116	115	114	115	116
Petrochemicals Index (B)	100	118	138	132	140	144	140	138	135	126
Agricultural Commodities Index (B)	100	104	110	114	118	124	122	123	124	122

Constraint Signals — revised methodology

Metric	W0	W3	W5	W7	W8	W9	W10	W11	W12	W13
Direct Sulfur Index (S)	100	130	166	157	162	179	183	190	193	192
Aluminum (S)	100	108	116	129	136	134	135	138	141	142
Constraint Index (B)	100	119	141	143	149	157	159	164	167	167

Lagging Confirmation

Metric	W0	W3	W5	W7	W8	W9	W10	W11	W12	W13
FAO Index (C)	100	100	102.4	102.4	102.4	102.4	104.1	104.1	104.1	104.1

Transmission Layer — Revised Official Consumer-Price Series

Metric	W0	W3	W5	W7	W8	W9	W10	W11	W12	W13
PMI Input Costs (L)	100	100	116	116	122	122	124	124	126	126
Food CPI (US) (C)	100	100	100.0	100.0	100.0	100.0	100.0	100.5	100.5	100.5
Food CPI (EU) (C)	100	100	100.1	100.1	100.1	100.6	100.6	100.6	100.6	100.6
Food CPI (JP+KR) (B)	100	100	99.5	99.5	99.4	99.4	99.0	99.0	98.9	98.9

II. Methodology Refinement — Direct Sulfur Replaces the Proxy

Beginning with this update, the GITT framework replaces the previous proxy Sulfur Index with a direct sulfur-market series.

The earlier proxy combined Brent–WTI, ULSD relative to crude, and TTF gas to approximate upstream tightness when direct sulfur data was not yet available in a usable form. That proxy helped identify the early transition from price transmission to physical constraint. However, direct sulfur pricing is now available with sufficient regularity and provides a cleaner read on the actual physical sulfur market.

The new Direct Sulfur Index uses Trading Economics Sulfur, CNY/T, rebased to the February 2026 average = 100 and averaged weekly. This series is classified as a single market metric, or (S), because it is a directly observed sulfur-market benchmark rather than a constructed basket.

The Constraint Index is therefore refined as:

Constraint Index = (Aluminum + Direct Sulfur Index) / 2

This is not a cosmetic change. It materially strengthens the constraint layer. Under the revised methodology, the Constraint Index is no longer merely holding above Inputs. It has moved above Energy. That suggests the system has likely shifted from an energy-led shock into a constraint-dominant phase.

III. What Changed in W13 — and What It Means

W13 continued the Energy cooling that began in W12. Crude, gasoline, diesel, and TTF moved lower, while LNG/JKM softened only modestly. As a result, the Energy layer declined again, supporting the IMF-style gradual absorption scenario at the surface level. The original shock layer is no longer accelerating.

However, the broader framework still does not confirm normalization. Inputs eased only modestly, mainly because Petrochemicals weakened. Fertilizers remained firm, while Agricultural Commodities were only slightly lower. The Inputs layer moved down, but not enough to erase the pressure already embedded in the production system.

The major change came from the methodology refinement in the Constraint layer. Beginning with W13, the proxy Sulfur Index has been replaced with direct sulfur pricing. Under the old proxy-based methodology, the Constraint Index would likely have moved close to Energy, but not decisively above it. The old proxy was partly tied to energy and refining variables, so it cooled together with the Energy layer.

The direct sulfur series tells a different story. It shows that the physical sulfur market remains extremely stressed even as oil and refined products cool. With direct sulfur now included, the updated Constraint Index rises to roughly 167 and moves above both Energy and Inputs. This is not simply a week-to-week market move. It is a clearer measurement of a constraint that the old proxy was likely underestimating.

That changes the interpretation materially. W13 is no longer just an Energy-cooling week. It reveals that the original shock has migrated into physical-input constraints. PMI Input Costs remain elevated at 126, while the consumer-price layer remains near the February baseline, keeping the Pressure Gap wide.

The result is a more serious but more precise signal: Energy is cooling, but the system has not normalized. The dominant stress has shifted from the original energy shock to the constraint layer.

IV. Forward Path and Key Takeaway

The IMF-style gradual absorption path remains possible, but W13 makes the test more specific. Energy is moving in the right direction for that scenario: crude, refined products, and TTF have cooled further, and the original shock layer is no longer accelerating. If this cooling continues and begins to pull Inputs, PMI pressure, Aluminum, and direct sulfur lower, the case for gradual absorption will strengthen.

However, W13 does not confirm that path yet. The methodology refinement shows that the direct sulfur market remains far more stressed than the previous proxy suggested. As a result, the updated Constraint Index now sits above both Energy and Inputs. This means lower oil alone is no longer enough to call normalization. The key question is whether the constraint layer follows Energy lower, or whether it remains elevated while Energy cools.

That distinction matters. If Energy falls and the rest of the system follows, the shock is being absorbed. If Energy falls while direct sulfur, Aluminum, PMI Input Costs, and Inputs remain elevated, the shock has not disappeared. It has migrated deeper into the production system.

The key takeaway is simple: W13 confirms Energy cooling, but not systemic relief. The updated sulfur methodology reveals a stronger physical-constraint signal, with the Constraint Index now above Energy. The market may be moving away from the initial energy-price shock, but the framework now points to a constraint-dominant phase unless direct sulfur and broader input pressures begin to cool.

V. Additional Observation — Inventory Cushion and the SPR Hard Stop

One additional factor should be considered when interpreting the W13 Energy cooling. Part of the visible relief in oil may be tied to inventory cushioning rather than full physical normalization. U.S. Strategic Petroleum Reserve stocks have fallen sharply since early March, with the drawdown accelerating through April and May and the reserve moving closer to the historical-low area reached in 2023 and 1983.

This matters because the SPR is not an unlimited stabilizer. Inventory releases can soften the Energy layer for a period of time, but they also reduce the remaining emergency buffer. As the reserve approaches prior lows, each additional barrel released becomes less of a simple market cushion and more of a draw against strategic insurance.

For GITT, the implication is important. If oil cools because inventories are being drawn down while direct sulfur, Aluminum, Inputs, and PMI pressure remain elevated, the system has not truly normalized. It has shifted pressure from spot energy prices into strategic buffers. That can delay the visible shock, but it also creates a hard stop: once the cushion becomes too thin, the market may begin to focus less on the barrels being released and more on the shrinking protection behind them.

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Publications

GITT: The Framework and Week 8 (April 24)

GITT: Week 9 – Pressure Rebuilds (May 1)

GITT: Week 10 (May 8)

GITT: Week 11 (May 15)

GITT: Week 12 (May 23)

Gasoline: The Pump Shock Nobody Is Ready For (April 23)

The Architecture of a Global Economic Crisis:

Part 1: How the System Breaks

Part 2: The Hidden Layer: Petrochemicals

Part 3: When It Reaches the Real Economy

Part 4: Historical Precedent

Part 5: Financial System Impact

Part 6: Early Signals: Stress Already Visible

March 15: Energy Crises – Historical Scale (open article)

March 18: Strait of Hormuz Risk: How a Middle East War Could Trigger a Global Supply Shock

March 19: RAS LAFFAN: GLOBAL ENERGY SHOCK: Part 1

March 19: Dutch TTF – Technical Forecast

March 25: Who Blinks First? The Energy War Reshaping Markets

April 3: ABU DHABI: SYSTEM STRESS EXTENDS: Part 2

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