The Strait of Hormuz, a vital maritime chokepoint, has become a focal point in the escalating tensions between the U.S. and Iran. Recent exchanges between the two nations have led to concerns about a potential return to full-scale conflict. U.S. President Donald Trump has maintained that the strait remains open, contrary to Iranian claims of its closure. This dispute follows a series of retaliatory actions that began after the funeral of Iran’s Supreme Leader Ali Khamenei. The area has seen increased military activity, with the U.S. reportedly escorting commercial ships through the strait.
Market participants appear to interpret these developments as supportive of a scenario where fewer ships transit the strait. The likelihood of fewer than 150 ships transiting the Strait of Hormuz between July 6 and July 12 has significantly increased, with markets pricing this outcome at 84.2% YES. This reflects heightened concerns over disruptions in maritime traffic due to the ongoing tensions. Additionally, the market assessing the probability of Iran committing not to attack ships in the strait remains low, currently priced at 0.5% YES, suggesting skepticism over Iran’s willingness to de-escalate.
