How the contract works
This market settles Yes if the IMF PortWatch seven-day moving average of transit calls through the Strait of Hormuz reaches or exceeds 60 on any single day before 1 October 2026, and No otherwise. A contract pays $1 if that threshold is hit in time and nothing if it is not; a price of 0.30, for example, would mean the market sees roughly a three-in-ten chance of the threshold being reached before the deadline, not that the outcome is three-tenths likely to happen exactly on that scale in any stricter sense. Data revisions that IMF PortWatch publishes on or before 30 September 2026 count toward settlement; anything revised after that date does not. Positions in this contract can typically be sold before 1 October 2026 at whatever price the market is quoting at the time, rather than held to settlement.
Yes2%
No98%
Probability
How the price has moved
The contract opened on 29 July 2026 at 80% and briefly traded as high as 88% before falling sharply to around 13%, a move of roughly 70 percentage points inside a single day of trading. That kind of swing, on a market with only 58 recorded observations and volume concentrated on one venue, points to an early price built on thin trading being overwritten once larger positions came in. The last 24 hours show a small 1.0 percentage point rise, a modest stabilization rather than a reversal of the broader drop. The scale of the initial move follows no single publicly reported trigger in the facts available here, but the direction โ from a market initially pricing normal traffic as likely to one pricing it as unlikely โ is consistent with a reassessment of how quickly Hormuz shipping recovers from elevated tension.
Analysis
Context
The Strait of Hormuz is the 33-kilometre chokepoint between Iran and Oman through which roughly a fifth of the world's seaborne oil and a large share of global liquefied natural gas pass. Iran has repeatedly threatened to close or restrict the strait during periods of confrontation with Israel and the United States, and shipping companies and insurers respond to those threats well before any physical blockage occurs, by rerouting, slowing transits, or demanding higher war-risk premiums. The IMF's PortWatch project tracks this in near real time using ship-tracking data, publishing a daily count of transit calls โ arrivals of container ships, tankers, dry bulk carriers, roll-on/roll-off vessels and general cargo ships โ that gives a direct, verifiable read on whether traffic has actually slowed or is running at its usual pace.
The headline number here is the size of the move, not just its direction. This contract was first recorded on 29 July 2026 at 80%, traded as high as 88% in its earliest hours, and has since fallen to around 13% โ a swing of roughly 70 percentage points inside a single day. With only 58 price observations logged so far and total volume of $1,329,435 concentrated on one venue, Kalshi, this pattern is consistent with a market that opened on light, exploratory trading before real positioning arrived and repriced it sharply lower. The last 24 hours show a small uptick of 1.0 percentage point, suggesting the market has now found something closer to a working level rather than continuing its earlier freefall. A single-venue market with this volume and history is still young; the price can be sensitive to a handful of large trades rather than a broad consensus. The core judgment embedded in a 13% price is that the 60-transit-call threshold is a high bar relative to where traffic has been running, and that the roughly two months remaining before the 1 October 2026 deadline is not much time for a de-escalation, if one happens, to feed through into ships actually resuming normal transit schedules. Shipping companies and their insurers tend to move cautiously: once war-risk premiums rise and routing decisions are made, they are not reversed on the basis of a single diplomatic statement, but only after a sustained period without incidents. The market's low price reflects that lag as much as it reflects the underlying military and diplomatic situation in the Gulf.
What moves the probability
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Iran-Israel-US tension trajectory
Any escalation in the confrontation involving Iran, Israel and the United States pushes the probability of normal traffic lower, because Iran has used threats against Hormuz as leverage in past crises. A durable ceasefire or de-escalation, by contrast, is the single event most likely to move this market back toward Yes, though the effect would take time to show up in actual transit counts.
Shipping insurance and war-risk premiums
Lloyd's-linked war-risk premiums and marine insurers' willingness to cover Hormuz transits directly shape whether shipping lines resume normal schedules. Elevated premiums, which typically lag behind the underlying security situation, keep transit counts below the 60-call threshold even after tensions ease.
US and allied naval posture
Escort operations, minesweeping activity, or a reduced US and allied naval presence in the Gulf change the calculus for commercial operators. A visible increase in naval protection could encourage a faster return to normal traffic; a drawdown would work against it.
IMF PortWatch data mechanics
Because the resolution depends on a seven-day moving average crossing 60, a short spike in traffic will not settle the market on its own; the average has to sustain the level for the threshold to register, and revisions published after 30 September 2026 do not count.
Time remaining before 1 October 2026
With roughly two months left, there is limited runway for a diplomatic resolution to translate into rerouted ships resuming their old schedules, which is one reason the market sits well below even odds.
The case for
- A ceasefire or de-escalation agreement involving Iran, Israel and the United States is reached and holds through at least September 2026.
- Marine insurers lower Hormuz war-risk premiums quickly enough for shipping lines to resume normal scheduling before the 1 October deadline.
- The IMF PortWatch seven-day moving average of transit calls sustains a reading of 60 or above on at least one day before 30 September 2026.
- No new incident, such as an attack on a vessel or a mining event, resets the de-escalation process in the coming weeks.
The case against
- Tensions between Iran and Israel, or Iran and the United States, remain unresolved or escalate further before 1 October 2026.
- Shipping companies and insurers keep war-risk premiums elevated even after any diplomatic progress, given how cautiously those markets typically move.
- The two months remaining are not enough time for a resumption of normal shipping schedules to register as a sustained seven-day average of 60 or more.
- A new incident in the Gulf, even a minor one, could delay any recovery in transit counts regardless of diplomatic developments.
What to watch
Watch for any formal ceasefire, ceasefire violation, or renewed military incident involving Iran, Israel or the United States in the Gulf region, since these are the events most likely to move shipping company and insurer behaviour. Watch weekly IMF PortWatch updates on the seven-day moving average of Hormuz transit calls, since that is the exact metric this market settles on. Watch marine war-risk insurance pricing from major underwriters, which tends to move ahead of visible changes in ship traffic. The window closes on 30 September 2026 for data revisions and 1 October 2026 for settlement, so the closer that date gets without a sustained 60-call average, the less time remains for a Yes outcome.