What is the Strait of Hormuz and why is it important?

The Strait of Hormuz is a narrow waterway between the Persian Gulf and the Gulf of Oman, critical for global oil shipments. About 4.1 billion barrels of crude oil and refined petroleum products pass through it annually, representing about 5% of the global total.

What does the Polymarket market predict about Strait of Hormuz traffic?

Polymarket assigns a 6.5% probability that the 7-day moving average of transit calls will return to normal (60 or above) by August 31, 2026. The market has a total volume of $4.76 million.

What are the main obstacles to reopening the Strait of Hormuz?

Key obstacles include ongoing US-Iran hostilities, Iran's demand for control over both shipping lanes, the presence of mines in the waterway, and the need to restore confidence among shippers and insurers.

When might the Strait of Hormuz return to normal traffic?

Industry experts have pessimistic outlooks. ADNOC's chief has said full flows may not resume until the first half of 2027. Our analysis suggests a 5% chance of normal traffic by August 31, 2026.

How does the US-Iran war affect oil prices and shipping?

The war has disrupted energy flows, causing highly volatile oil prices. Brent crude briefly exceeded $100 per barrel. Shipping through the strait has slowed to a near standstill, affecting global supply chains.

Strait of Hormuz Traffic: Return to Normal by August 31?

Q: What is the current traffic level through the Strait of Hormuz?

As of late July 2026, traffic is extremely low. Over the weekend of July 25-26, only 13 transits per day were recorded, a 90% decline compared with pre-conflict levels. Volume has fallen by more than 95%.

Polymarket assigns a 6.5% probability that Strait of Hormuz traffic will return to normal (7-day moving average ≥60) by August 31, 2026. Our analysis, based on recent conflict escalation and extremely low transit counts, estimates a 5% chance. The market may be slightly overestimating the likelihood of a rapid recovery.

This analysis was produced with AI assistance and reviewed by the PolyVeritas editorial team.

In brief

Polymarket assigns a 6.5% probability that the 7-day moving average of transit calls through the Strait of Hormuz will reach or exceed 60 by August 31, 2026. Our analysis, based on recent conflict escalation and extremely low transit numbers, estimates a 5% chance. The market may be slightly overestimating the likelihood of a rapid recovery.

Introduction

The Strait of Hormuz, a narrow waterway connecting the Persian Gulf to the Gulf of Oman, is a critical chokepoint for global oil shipments. Since the US-Iran war began in February 2026, traffic through the strait has plummeted. Polymarket's prediction market asks whether the 7-day moving average of transit calls, as measured by IMF Portwatch, will return to a normal level of 60 or above by August 31, 2026. This article analyzes the current situation and the factors that could influence the outcome.

What to know

The Strait of Hormuz is only 29 km (18 miles) wide at its narrowest point, limiting traffic to two channels for inbound and outbound shipments (Al Jazeera, July 30, 2026). In 2024, 4.1 billion barrels of crude oil and refined petroleum products passed through the strait – about five percent of the global total (Al Jazeera, July 30, 2026).

As of late July 2026, traffic through the strait is running at about half the normal flow, according to a CNBC report (CNBC, July 30, 2026). However, more granular data from Clarksons Research indicates that over the weekend of July 25-26, only 13 transits per day were recorded – a 90% decline compared with pre-conflict levels (Hansa News, July 28, 2026). Volume, measured in tonnage, has fallen by more than 95% (Hansa News, July 28, 2026).

The conflict has disrupted energy flows significantly. Wartime traffic fell from 82 ships during July 13-19 to only 39 from July 20-26, according to Lloyd's List Intelligence (10 Things Global News, July 31, 2026). The US and Iran have committed to reopening the strait, but returning traffic to prewar levels presents significant challenges, including mine threats and Iran's demand for control over both shipping lanes (Energy Now, July 31, 2026; Tech Times, July 29, 2026).

The UN has condemned the attacks and called for an immediate return to the ceasefire (UN News, July 14, 2026). The US Energy Secretary has stated that the US will continue to assure the flow of traffic through the strait (The Hill, July 19, 2026). However, Iran's Islamic Revolutionary Guard Corps has vowed to keep the strait closed as long as US wrongdoing in the region continues (NBC News, July 21, 2026).

The market numbers

The Polymarket event has a total volume of $4,761,870.232 and total liquidity of $876,291.607. The market closes on August 31, 2026. The current outcomes and implied probabilities are:

Outcome	Implied Probability
August 31	6.5%
August 15	0.9%

Note: The market is binary, resolving to "Yes" if the 7-day moving average reaches or exceeds 60 by August 31, 2026, and "No" otherwise. The probabilities shown are for the "Yes" outcome on each specific date. The overall "Yes" probability is 6.5% (for August 31), and the "No" probability is 93.5%.

The factors at play

Ongoing hostilities: The US-Iran war continues, with recent strikes and counter-strikes. US Central Command said American forces hit dozens of Revolutionary Guard targets on July 30-31 (10 Things Global News, July 31, 2026). This makes a rapid de-escalation unlikely.
Extremely low transit numbers: Current traffic is at 13 transits per day, a 90% decline from normal (Hansa News, July 28, 2026). To reach a 7-day moving average of 60, traffic would need to increase nearly fivefold in a short period.
Iran's demands: Iran is demanding control over both shipping lanes and has rejected Oman's voluntary-fee plan (Tech Times, July 29, 2026). This hardline stance complicates negotiations.
Mine threats: The presence of mines in the strait poses a significant obstacle to resuming normal traffic (Energy Now, July 31, 2026).
Economic pressure: Saudi Arabia's economy contracted 4.8% annually in Q2 2026, its sharpest decline since the pandemic, driven by a 24.7% plunge in the oil sector (The National, July 30, 2026). This creates pressure to resolve the crisis, but may not be sufficient to force a quick resolution.
Pessimistic outlook from industry: ADNOC's chief Jaber has said that full Hormuz flows may not resume until the first half of 2027 (Energy Now Canada, July 29, 2026).

Our prediction

According to our analysis, the most likely outcome is No (the 7-day moving average will not reach 60 by August 31, 2026). Polymarket currently assigns a probability of 93.5% to this outcome (implied by the 6.5% "Yes" probability), while our internal estimate is 95%. The difference stems from these factors: the market may be slightly overestimating the chance of a rapid recovery given the extremely low current transit numbers (13 per day) and the ongoing escalation of hostilities. Even if a ceasefire is reached, clearing mines and restoring confidence among shippers will take time, making it unlikely that the 7-day moving average will reach 60 within the next 31 days.

Risks and uncertainties

Sudden diplomatic breakthrough: A surprise agreement between the US and Iran could lead to a rapid reopening of the strait, though this seems unlikely given recent events.
Data revisions: IMF Portwatch may revise previously published data, which could affect the resolution of the market.
Data integrity issues: If erroneous data is published, the market may remain open for corrections, potentially delaying resolution.
Unexpected military action: A major escalation could further reduce traffic, making the "No" outcome even more certain.
Alternative shipping routes: Increased use of the Red Sea via Yanbu (Saudi Arabia) could reduce pressure to reopen Hormuz quickly, but this does not directly affect the market's resolution criteria.

Conclusion

The Strait of Hormuz remains largely closed to normal traffic due to the ongoing US-Iran war. With current transit numbers at a fraction of normal levels and no sign of imminent de-escalation, the probability of a return to normal by August 31, 2026, is very low. The Polymarket market's 6.5% "Yes" probability appears slightly optimistic; our analysis suggests a 5% chance. Traders should monitor developments in US-Iran negotiations and IMF Portwatch data closely.

This content is for informational purposes only and does not constitute financial, political or investment advice, betting advice, or any operational recommendation.