STRAIT OF HORMUZ — Speculators on the prediction market Kalshi assigned a 44% chance that traffic flows in the Strait of Hormuz will return to normal by December 1. This assessment follows U.S. military strikes against Iran after attacks on commercial vessels in the area, leading to renewed conflict.

President Donald Trump stated that the ceasefire with Iran is "over" after the U.S. conducted these strikes. Kalshi defines normal traffic flows as a seven-day moving average of transit calls through the strait exceeding 60. The outcomes for Kalshi contracts are verified using data reported from IMF PortWatch.

As recently as July 4, traders on Kalshi had placed more than 50% odds that traffic flows would normalize by October 1. The earliest date for which Kalshi speculators forecast normal traffic in the Strait of Hormuz is January 1, 2027, when the odds increased to 53%.

Separately, speculators on Polymarket indicated a 59% chance that traffic flows would return to normal in the Strait of Hormuz by December 31. Polymarket utilizes the same definition and data as Kalshi for resolving contracts related to traffic in the Strait of Hormuz.

Piper Sandler analyst Jan Stuart wrote in a recent note that traffic in the strait is "suddenly very far from normal." Stuart also stated, "With the Strait back in play, global oil supply is again way short," and added, "Any hope of commercial insurers reducing 'war risk' assessments in months has been sunk."

Why It Matters

The assessments from prediction markets like Kalshi reflect market sentiment regarding the stability of a critical global shipping lane after recent military actions. Changes in these forecasts indicate an evolving perception of risk and potential disruptions to global trade, particularly concerning oil supply and shipping insurance. The Strait of Hormuz is a key passage for commercial vessels, and any prolonged disruption affects international commerce and energy markets.