Probability
How the price has moved
The market has been tracked only since 29 July 2026, but its short history tells a consistent story. It opened with the probability of a return to normal at roughly 9%, traded within a narrow 1% to 9% band, and now sits at 7% after a 3.0 percentage point rise over the past day. There is no sharp repricing anywhere in that history — the move follows no single publicly reported trigger — which points to a market that settled on a low-probability view quickly and has seen little since to change it. The identical pricing across Polymarket and Kalshi, with a spread of 0.0 percentage points, reinforces that this is a stable, shared assessment rather than one venue leading the other.
Analysis
Context
The Strait of Hormuz is the narrow sea passage between Iran and Oman that connects the Persian Gulf to the open ocean. It is the only maritime route out for oil exporters including Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Iraq and Iran itself, and it is commonly cited as carrying around a fifth of the world's oil trade. Any sustained drop in transits there has direct consequences for global energy markets.
IMF PortWatch tracks vessel movements at major chokepoints using satellite tracking data, reporting a 7-day moving average of transit calls. This market resolves Yes only if that average reaches or exceeds 60 calls on any date up to 31 August 2026 — a level meant to represent something close to the pre-disruption baseline for the strait. If PortWatch does not publish a reading at or above that threshold by the deadline, or shortly after under each venue's grace period for data publication, the market resolves No.
The market was first tracked on 29 July 2026, meaning it has only a short trading history so far, but both major venues already show a firm, near-identical view on where this stands.
The consensus across venues sits at 7%, and it is unusually well agreed: Polymarket and Kalshi, which together have traded $6,340,850 on this question, show identical prices with a spread of 0.0 percentage points between them. Both settle by the same source, IMF PortWatch, so that agreement is not surprising — there is no dispute here about whose data feed to trust, only about how likely a specific data outcome is.
The history is short but informative. When the market was first recorded on 29 July 2026, the probability of a return to normal stood at roughly 9%. It has traded in a narrow band since, moving between about 1% and 9%, and is currently at 7% after rising 3.0 percentage points in the past day. That is a market that has consistently priced this as a long shot from day one, with only small day-to-day adjustments rather than any dramatic repricing — a sign that whatever is driving the disruption has not meaningfully changed in the last 24 hours, even as the number ticks slightly higher.
The mechanics of the settlement rule matter as much as the politics. Sixty transit calls in a 7-day average is not a low bar during an active security disruption: shipping companies that have rerouted, slow-steamed, or added war-risk insurance surcharges do not reverse those decisions overnight, even if tensions ease. Vessel scheduling, crew safety assessments and insurance underwriting all take time to normalize, and with roughly a month left before the 31 August 2026 deadline, the window for that full a recovery to show up in PortWatch's data is short.
The 87 recorded price observations so far, all clustered at the low end of the range, suggest a market that formed its view quickly and has seen little reason to revise it since. That is consistent with a situation where the underlying facts on the ground — whatever security or geopolitical conditions are suppressing traffic — have not shifted enough to change the calculus.
What moves the probability
Regional security conditions
Ongoing tension in the Gulf keeps war-risk insurance premiums elevated and pushes shipping companies to reroute or slow-steam through the strait rather than transit at normal pace. This is the dominant force holding the probability down, since it directly suppresses the vessel-call count PortWatch measures.
The 60-call threshold itself
The settlement bar represents something close to a pre-disruption baseline, not a partial or gradual recovery. Reaching it requires a broad, sustained rebound in traffic rather than a few extra transits, which makes Yes structurally harder to hit.
Time remaining before 31 August 2026
With only about a month left, there is limited room for insurers, ship operators and charterers to fully reverse the operational changes made during the disruption, even if conditions improve. A shorter window mechanically favors No.
Venue agreement on the same data source
Polymarket and Kalshi both settle by IMF PortWatch and show a 0.0 percentage point spread, meaning there is no cross-venue disagreement to arbitrage. That reinforces confidence that the 7% figure reflects a genuine, shared read of the situation rather than a pricing anomaly.
Data publication lag
PortWatch updates its figures with some delay after vessel movements occur, which slightly shortens the effective window in which a qualifying reading could appear before the deadline. This is a modest but real drag on the probability of Yes.
The case for
- A ceasefire or verified de-escalation involving the parties active in the Gulf would need to take hold well before 31 August 2026 to leave time for shipping to normalize.
- Insurers would need to lower war-risk premiums for Hormuz transits, and ship operators would need to resume standard routing and scheduling rather than continuing to reroute or slow-steam.
- IMF PortWatch would need to publish a 7-day moving average of transit calls at or above 60 on at least one date before the deadline, reflecting a broad rebound rather than a temporary spike.
- This would have to happen within the roughly one-month window remaining, which is short relative to how long shipping and insurance markets typically take to fully reset after a disruption.
The case against
- Regional tensions affecting the Gulf remain unresolved as of late July 2026, with no confirmed de-escalation reported.
- Shipping companies have adjusted routing, speed and insurance arrangements in response to the disruption, and those changes do not reverse quickly even if conditions improve.
- Only about a month remains before the 31 August 2026 deadline, a tight window for a full return to a 60-call, 7-day average baseline.
- Both major venues price this at just 7% with zero spread between them, indicating a rare degree of agreement that the threshold will not be met in time.