Polymarket

Strait of Hormuz Traffic Unlikely to Normalize by End of May Amid Escalating Tensions

A Polymarket prediction market heavily favors 'No' on the Strait of Hormuz traffic returning to normal by May 31, 2026, reflecting ongoing severe disruptions and geopolitical instability in the critical waterway.

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— 4 min read

A prediction market on Polymarket, with a substantial trading volume of over $14.5 million, indicates a strong consensus that shipping traffic in the Strait of Hormuz will not return to a 7-day moving average of 60 transit calls by May 31, 2026. The current market odds reflect this sentiment, with the 'No' outcome trading at 0.9485, suggesting a high probability of continued disruption. The 'Yes' outcome, requiring traffic normalization as reported by IMF Portwatch, stands at a mere 0.0515.

This market's resolution hinges on data from IMF Portwatch, which tracks daily transit calls for various ship types including container, dry bulk, roll-on/roll-off, general cargo, and tanker ships. The Strait of Hormuz is a vital chokepoint, facilitating a significant portion of global oil and liquefied natural gas (LNG) trade, and its disruption has profound implications for global energy markets and supply chains.

Escalating Regional Crisis Halts Traffic

The pessimistic outlook is firmly rooted in the severe geopolitical crisis gripping the region. Since February 28, 2026, the Strait of Hormuz has been "effectively closed to normal commercial shipping" following US and Israeli military strikes on Iran and subsequent retaliatory actions by Tehran. This has led to an unprecedented halt in commercial maritime activity.

IMF Portwatch data vividly illustrates the drastic reduction. Between March 1 and April 12, 2026, the average daily transit calls plummeted to 6 to 7 ships, a stark contrast to the pre-conflict average of approximately 100 to 140 vessels per day. As of May 10, 2026, the situation remains dire, with daily transit calls at 4.00 and the 7-day moving average a mere 1.57, far below the 60-vessel threshold for market resolution. Reports indicate that traffic through Hormuz operated at roughly 5% of its pre-war average throughout April. The disruption has stranded over 1,550 vessels and 22,500 mariners in and around the strait as of early May.

Iran's Assertions and US Blockade

Recent developments further complicate any prospects of a swift return to normalcy. Iran has asserted greater control over the waterway, announcing plans to introduce a "professional mechanism" to manage maritime traffic and impose fees. First Vice President Mohammad Reza Aref stated that Iran would no longer permit the passage of "enemy" military equipment, signaling a tougher stance on maritime security. This move is considered a significant escalation, with Western diplomats deeming Iran's proposals unlawful due to their imposition of tolls and arbitrary selection rights for transiting ships.

In response, the United States has imposed a naval blockade in the Gulf of Oman and the Arabian Sea east of the Strait of Hormuz, rejecting Iran's peace proposals. While a temporary ceasefire between the US and Iran was announced, major shipping lines like Maersk continue to advise against transit, citing ongoing volatility and lack of "full maritime certainty" as of May 12, 2026.

Double Disruption and Market Implications

The crisis in the Strait of Hormuz is compounded by the ongoing disruptions in the Red Sea, where Houthi attacks continue to reroute vessels around the Cape of Good Hope. This "double-disruption problem" has created the most challenging logistics environment since the COVID-19 pandemic, leading to significant increases in shipping costs, with some routes experiencing a 125-180% surge.

The market odds, heavily favoring 'No,' accurately reflect the current reality on the ground. Given the latest IMF Portwatch data showing transit calls far below the "normal" threshold of 60, coupled with escalating geopolitical tensions, naval blockades, and Iran's assertive new policies, a return to pre-crisis traffic levels by May 31, 2026, appears highly improbable. The market's strong bearish position aligns with expert assessments of a prolonged and complex disruption to one of the world's most critical maritime arteries.

Sources:

Market data fetched at 2026-05-17 06:17 UTC | Polymarket ID: 1809560

This article is generated by AI for informational purposes only. It does not constitute financial advice. Always do your own research before making any investment decisions. Data sourced from Polymarket and public web sources.

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