The Strait of Hormuz, the narrow waterway separating Iran and Oman, channels approximately one-third of the world's seaborne oil trade and nearly all liquefied natural gas exports from the Persian Gulf. At 3% YES odds, the market is pricing in continued near-normal transit volumes through May 11-17. The question sets the bar at 60-79 ships, which represents a below-average week compared to the historical 20-25 daily average (roughly 140-175 per week). A YES resolution would require a material drop in traffic, potentially triggered by military escalation, sanctions changes, environmental disruption, or sudden geopolitical crisis. The current low odds reflect trader consensus that the corridor will remain open and functional, with shipping volumes maintaining their recent trajectory. Resolution will depend on verified maritime traffic data compiled by international shipping authorities.
What factors could move this market?
The Strait of Hormuz has been a critical junction in global energy markets for decades, but its geopolitical salience has intensified over the past five years. The waterway is roughly 34 miles wide at its narrowest point, creating a natural choke point that cannot be easily bypassed. Any disruption—whether military, environmental, or regulatory—ripples through global oil markets within hours. Between 2019 and 2022, the strait experienced multiple crises: the Saudi Aramco attacks, increased US-Iran tensions, and temporary blockades that raised oil prices and sparked headlines about energy security worldwide. In recent years, daily transits have stabilized in the 20-25 ship range. A week seeing only 60-79 transits would imply an average of 8.5-11 ships per day—roughly 60% of normal flow—suggesting either a dramatic supply-side shock or confluence of events reducing shipping demand or blocking passage.
What could push transits down to YES territory? Escalating Iran-US military tensions remain the most direct catalyst. Any new sanctions, military drills gone live, or blocking action by Iranian forces could reduce transit volumes overnight. Environmental incidents or weather disruptions are secondary but plausible. What would keep traffic flowing above 60-79? Continued diplomatic stability, absence of military incidents, and steady global oil demand are the baseline. OPEC production decisions, seasonal refinery maintenance, and renewable energy adoption all subtly shape daily flows, though their effects are gradual.
The 3% YES pricing reveals strong trader conviction in stability. Markets are not pricing in a near-term crisis; instead, they expect the strait to function as it has for the past 18 months. Geopolitical risk in the region is always non-trivial, but traders assess the probability of disruption severe enough to drop transit counts to 8.5 per day as very low for this one-week window. Any hardening in Iran-US rhetoric, new sanctions, or credible military activity could shift odds sharply higher. The market is also sensitive to oil price movements: if crude spikes on geopolitical fears, YES odds may rise preemptively.
What are traders watching for?
Daily maritime traffic reports from Tanker Trackers, Lloyd's, and UKMTO between May 11-17
US-Iran diplomatic statements or Persian Gulf military activity
Crude oil price and geopolitical risk premium (signal of trader concerns)
OPEC or Iranian oil export announcements affecting regional supply
New international sanctions or regulatory changes on energy trade
How does this market resolve?
Market resolves YES if verified daily maritime traffic data shows 60-79 total ships transiting the Strait of Hormuz between May 11-17, 2026. Resolution determined by official shipping authorities and maritime tracking services.
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