Our take · Polymarket
Strait of Hormuz traffic returns to normal by December 31?
Market says
20%
We think
10%
Ships aren't coming back to the Strait of Hormuz anytime soon. The market gives it a 1-in-5 shot by New Year's; we think it's closer to 1-in-10.
Published research
Why is this priced here?
One number, explained: what the market is pricing, what would have to happen for it to be right, and what could move it.
Market says
20%
We think
10%
What the price is really asking
A price like this is a bet on one specific outcome, settled by one named source. From our research record, word for word:
IMF Portwatch Strait of Hormuz page; 7-day MA of transit calls >= 60 on any date May 6-Dec 31, 2026
The evidence
Traffic collapsed in March and never recovered. Even June's brief diplomatic thaw peaked at about 32 a day, half of what's needed. We weight the current reading heavily because the gap is structural, not noise: it would take a 19-fold sustained increase.
IMF Portwatch ArcGIS Daily_Chokepoints_Data, via market's settlement source
What would move it
- Signed detailed US-Iran agreement with verification (not MOU-level)
- Portwatch 7-day MA breaks above 15 and holds for 2+ weeks
- Major insurer publicly resumes normal Hormuz coverage
The path
Trace the shock behind this price, step by step: What if Hormuz stays choked through winter? →
Illustrative only. Not financial advice. Not a recommendation.
Exited early
We closed this paper position on 2026-10-22 at 88% for our NO side, realizing +$46.58 on a $500 paper stake. Edge exhausted: re-underwritten YES range 10-16% against a market at 11.5%; the conservative bound fails the Framework v2 continuation test at the executable bid. Council 4-1 for exit; ratified by Harsha Oct 22, 2026.
Hold-to-resolution value will be published at resolution; the original forecast still grades.
Our thinking
This one settles on a hard number: IMF Portwatch needs to show 60 ships a day through the strait, averaged over a week. Right now it's showing about 3. That's not a gap you close with a good week; it needs roughly 19 times more traffic, sustained. In June, when the US and Iran briefly made a deal, traffic spiked but peaked at half the needed level, then collapsed when the deal fell apart. The thing keeping ships away isn't a lack of oil to move, it's war-risk insurance: with six vessels hit since late September and a US blockade running, insurers won't cover normal sailings until there's a real political settlement. The highest-level US-Iran talks since 1979 just ended 48 hours ago with no agreement. Twelve weeks is short for all of that to untangle.
The data behind our view
Traffic collapsed in March and never recovered. Even June's brief diplomatic thaw peaked at about 32 a day, half of what's needed. We weight the current reading heavily because the gap is structural, not noise: it would take a 19-fold sustained increase.
IMF Portwatch ArcGIS Daily_Chokepoints_Data, via market's settlement source
Key facts
Portwatch at 3.1/day vs 60 needed
IMF Portwatch 7-day moving average of Hormuz transit calls was 3.1/day as of Sep 27, 2026 (latest published). The threshold is 60. Recent weeks: 22-28 transits per week vs 420 needed.
IMF Portwatch ArcGIS Daily_Chokepoints_Data · 2026-10-05
Traffic flat at rock bottom since August
Monthly 7-day MA: Jun 11.0, Jul 11.8, Aug 4.9, Sep 3.8. No recovery momentum; trend is flat-to-declining.
IMF Portwatch series, computed Oct 5 2026 · 2026-10-05
June recovery peaked at half the threshold
During the short-lived June US-Iran pact, daily transits hit 25-51/day and the 7-day MA peaked around 32, then collapsed when the pact crumbled and the US reimposed its naval blockade in mid-July.
IMF Portwatch; SP Global via Baird Maritime Oct 2 2026 · 2026-10-02
Crude volumes recovered but don't count
September crude flows near pre-war (13-13.5 mb/d) move under US naval escort with transponders off. Portwatch counts AIS-reported transits; dark shuttle traffic largely doesn't register.
JPMorgan/Goldman via TradersUnion Sep 30; Bloomberg Oct 2 2026 · 2026-10-02
War-risk insurance still prohibitive
Six vessels struck since Sep 28. Iran requires permits/fees and presses traffic into its northern corridor. US blockade of Iranian ports since July 14.
Eagle Intel Maritime Oct 1; UKMTO; Strategic Energy Map Oct 3 2026 · 2026-10-03
Highest-level talks in 47 years just failed
US-Iran talks in Islamabad Oct 3-4 (21 hours, VP Vance leading) ended with no agreement. Iran demands blockade lifted, $12B unfrozen, sanctions waived, regional ceasefire before the strait reopens.
AP/Signal Post News Oct 4-5 2026 · 2026-10-05
What would change our mind
- Signed detailed US-Iran agreement with verification (not MOU-level)
- Portwatch 7-day MA breaks above 15 and holds for 2+ weeks
- Major insurer publicly resumes normal Hormuz coverage
How confident are we
Fairly confident on the numbers, honest that the politics could surprise. If a real deal gets signed, we'd update fast.
Work through it yourself
Don't take our word for it — explore the what-ifs behind this market and form your own view.
What if Hormuz stays choked through winter? →
The strait has effectively collapsed since the Feb 28, 2026 strikes on Iran: EIA put 2Q26 transits at 4.9 mb/d against a 21.6 mb/d 4Q25 baseline, and Kpler's strongest August week showed 4.26 mb/d of crude leaving. Transits run at 3–7 vessels a day, and the main Saudi bypass pipeline was shut by drone attack in September. This guide models how long the choke persists through winter, whether the remaining ~4–5 mb/d of crude flows erode further, and how much stockpile cover buffers the gap — while flagging the widely disputed flow figures.
What if energy infrastructure gets hit next? →
The US-Iran war is underway since February 28, 2026; Hormuz tanker traffic has slowed to a trickle, and a mid-September 2026 drone attack shut Saudi Arabia's East-West Pipeline, which had been moving 4-5 million barrels a day. This scenario models NEW physical damage to Gulf energy infrastructure beyond what has already happened — to processing plants, export terminals, or pipelines on either side of the Gulf. Tension, threats, or shipping rerouting alone do not count: the dial only counts operator- or EIA-confirmed physical capacity destroyed.
We paper-trade our views so you can see how our thinking ages.