How the contract works
A contract on this market settles at $1 if the 7-day moving average of vessel transit calls through the Strait of Hormuz, as measured by IMF PortWatch, climbs above 60 at any point before 1 July 2027. It settles at nothing if that threshold is never reached by then. The price at any moment reflects what buyers and sellers currently think the chance of that happening is โ a contract trading at 0.30, for example, would imply the market sees roughly a three-in-ten chance of the threshold being crossed, not this market's actual price. Positions can typically be sold before the settlement date at whatever price the market has moved to by then, so a holder is not obligated to wait for resolution to exit.
Yes44%
No56%
Probability
How the price has moved
The probability opened at 59% on 29 July 2026, the first day this market was recorded, and has since drifted down slightly to a consensus of 57%. Across 29 recorded observations, the price has stayed within a tight 56% to 60% range, and it has not moved at all in the most recent 24 hours. That pattern โ a narrow band with no sharp jumps and no directional trend โ indicates a market that views the underlying geopolitical situation as unsettled but not actively deteriorating or improving, and that has not been given a clear new catalyst since it began trading.
Analysis
Context
The Strait of Hormuz is the narrow waterway between Iran and Oman through which roughly a fifth of the world's oil and a large share of liquefied natural gas moves by tanker. Any sustained slowdown in transits there raises global energy prices and shipping insurance premiums, because vessels either wait longer, take longer routes, or face costlier war-risk cover. Traffic through the strait has been depressed at points since 2024, driven by a mix of Iranian threats to close the passage during periods of conflict with Israel and the United States, and by insurers and shipowners pulling back after attacks on vessels elsewhere in the region.
IMF PortWatch, a data project run with the IMF, publishes near-real-time estimates of vessel transit calls at major chokepoints, including Hormuz, based on satellite tracking (AIS) data. This market resolves Yes if the 7-day moving average of transit calls rises above 60 at any point before 1 July 2027, and No if it never does. That threshold is meant to represent something close to pre-disruption normal traffic levels, though the market itself does not publish a formal baseline figure for comparison.
The underlying tension driving today's lower traffic levels stems from repeated Iranian statements about closing the strait in response to sanctions or military pressure, US naval deployments to deter that outcome, and periodic incidents involving tankers being seized, shadowed, or attacked. None of these have permanently closed the strait, but they have been enough to suppress transit volumes below prior peaks for extended stretches.
The consensus figure across the one tracked venue, Kalshi, currently sits at 57%, having opened at 59% when first recorded on 29 July 2026. Over the period tracked, the price has ranged narrowly between 56% and 60% across 29 recorded observations, with no movement at all in the most recent 24 hours. That is a market that has essentially made up its mind within a tight band and is not finding new information to shift it meaningfully โ a flat, narrow range like this usually signals that traders see the underlying situation as unresolved but stable, not as trending decisively toward either outcome.
The substance behind that pricing is geopolitical rather than economic. Hormuz traffic has been suppressed periodically since 2024 by episodes of Iranian rhetoric about closing the strait, actual seizures or harassment of tankers, and by US and allied naval deployments meant to keep the passage open. None of these episodes has produced a full closure, and historically โ including during the 1980s tanker war and various flare-ups since โ the strait has never been shut for an extended period despite repeated threats. That precedent supports the idea that a rebound above the 60-transit threshold is plausible without a dramatic political breakthrough, simply through gradual normalization of shipping and insurance risk assessments once the acute phase of tension passes.
At the same time, the market's persistent position in the mid-to-high 50s suggests real doubt that normalization arrives within the roughly 11-month window before 1 July 2027. If tensions between Iran, Israel, and the United States remain elevated, insurers may keep war-risk premiums high enough that some shipping continues to reroute or slow, keeping transit counts below the threshold. The single Kalshi venue and its $941,768 in volume represents a moderate but not enormous amount of capital behind the current price, meaning it reflects a real but not overwhelming degree of conviction. Because IMF PortWatch data updates continuously, sudden shifts are possible whenever new transit figures are published or a geopolitical event changes assessments of the risk to shipping.
What moves the probability
Iran-US-Israel tension
Renewed conflict or escalation drives insurers and shipowners to reduce transits, pushing this toward No; a durable de-escalation or ceasefire arrangement supports a rebound toward Yes. This is the single largest swing factor given the region's history of rapid escalation and de-escalation cycles.
Tanker insurance and war-risk premiums
When war-risk premiums for Hormuz transits rise, some owners reroute or delay voyages, which suppresses the 7-day moving average and weighs against Yes. Premiums tend to fall gradually once a period of calm is sustained, which would support normalization.
US naval presence and escort operations
Increased US or allied naval activity to guarantee safe passage tends to restore shipper confidence over time, pushing toward Yes. Reduced presence or a new incident involving a tanker would work in the opposite direction.
IMF PortWatch data reporting cadence
Because resolution depends on a specific data series updated regularly, any methodology change or reporting gap at IMF PortWatch could affect how quickly a rebound above 60 transits is recognized. This is a smaller but real operational factor separate from the underlying shipping reality.
Global oil demand and shipping schedules
Broader shifts in global oil demand or seasonal shipping patterns can raise or lower baseline transit volumes independent of Hormuz-specific risk, with higher demand modestly supporting a move toward Yes.
The case for
- A ceasefire or sustained de-escalation between Iran, Israel and the United States removes the main incentive for shipowners to avoid or reroute around the strait.
- War-risk insurance premiums fall back toward pre-crisis levels as the perceived threat to tankers subsides, encouraging fuller transit schedules.
- Historical precedent shows the strait has never been closed for an extended period despite past threats, meaning traffic has previously recovered from earlier disruptions within a comparable timeframe.
- Continued US and allied naval presence maintains enough confidence among shipping companies that transit volumes climb back above the 60-call threshold before 1 July 2027.
The case against
- Renewed military escalation involving Iran, Israel or the United States before mid-2027 keeps insurers and shipowners cautious, suppressing transit counts.
- Elevated war-risk premiums persist even without new attacks, because insurers are slow to reprice risk downward after a volatile period.
- A single new incident, such as a tanker seizure or attack, could reset the de-escalation clock and keep traffic below the threshold for the remainder of the window.
- The market has stayed in a narrow 56% to 60% band for its entire recorded history, suggesting traders see no strong signal yet that a rebound is imminent.
What to watch
The clearest near-term signals are new IMF PortWatch transit data releases, which update the 7-day moving average that directly determines resolution. Beyond that, any developments in Iran-US or Iran-Israel relations โ including negotiations, sanctions announcements, or military incidents โ are likely to move shipping and insurance behavior quickly. Announcements from major shipping insurers about war-risk premium changes for Hormuz transits, and any US Navy statements about escort operations or freedom-of-navigation activity in the strait, are also worth tracking between now and the 1 July 2027 settlement date.