In brief
Polymarket gives only a 37.5% chance that Strait of Hormuz traffic will return to normal (7-day moving average of ≥60 transit calls) by December 31, 2026. Recent data shows daily transit counts around 10-12 vessels, approximately 90% below pre-conflict baselines. Geopolitical tensions, ongoing attacks on ships, and the lack of a comprehensive agreement make a full recovery before year-end highly unlikely.
Introduction
The Strait of Hormuz, a narrow waterway connecting the Persian Gulf to the open ocean, normally handles about one-fifth of the world's daily oil and liquefied natural gas supplies. But since the US-Iran conflict escalated in late February 2026, traffic has plummeted. Polymarket is now asking bettors: will the Strait’s transit calls recover to an average of 60 per day by December 31, 2026? With current numbers hovering around 10-12 per day, the gap is enormous.
What to know
According to Reuters, fewer than 20 ships transited the strait over a recent weekend – a tiny fraction of the 100+ that once passed daily. Data from the International Monetary Fund's Portwatch platform is the official resolution source for this market, requiring a 7-day moving average of transit calls equal to or above 60 for any date through December 31.
The Jerusalem Post reports that traffic is approximately 90% below pre-conflict baselines. Tanker traffic, at 45% of total vessels, still dominates. Attacks persist: since July 6, the UKMTO has reported 23 incidents of projectile strikes causing serious damage to vessels.
A notable development, Gulf News reports that about 80% of vessels are now travelling with their AIS transponders switched off (“going dark”). The US Navy is helping escort ships through a southern corridor close to Oman, but Iran has still managed to strike vessels in that route, as noted by The New York Times.
Despite Trump administration claims that oil is flowing normally again, CNN Business and NBC News independently confirm that actual traffic remains minimal. On August 26, only 5 commodity vessels crossed, according to US News. The market appears skeptical of a quick fix: Brent crude remains above $91 a barrel, as reported by CNBC.
The market numbers
| Outcome | Probability | Volume |
|---|---|---|
| Yes | 37.5% | $9,590,427 |
| No | 62.5% | (same pool) |
The market has strong liquidity ($468,561). The “No” outcome is heavily favored, reflecting bettors’ view that normal traffic will not resume this year.
The factors at play
- Current traffic volume: At 10-12 daily transits, the 60-ship target is far away. Reaching it would require a 5-6x increase in activity within four months.
- Geopolitical stalemate: Iran continues to assert control over the strait (see CBS News). Negotiations have not produced a breakthrough.
- Security risks: Attacks on vessels persist, including on the US-escorted “southern route.” Insurers are likely charging extremely high premiums, deterring shipping companies.
- Tanker “going dark”: The practice of switching off AIS transponders complicates tracking and suggests a fundamentally unstable security environment.
- Economic pressures: High oil prices (Brent >$91/barrel) incentivize finding alternatives, but pipeline capacity and alternative routes are limited.
- Time horizon: Only ~4 months remain until Dec 31. Even if a deal is reached soon, restoring traffic to 60 ships/day would take weeks.
Our prediction
According to our analysis, the most likely outcome is No. Polymarket currently assigns a probability of 62.5% to No, while our internal estimate is 85%. The difference stems from these factors: (1) current traffic is far below the target with no rapid increase visible; (2) attacks on ships continue despite US Navy protection; (3) Iran shows no sign of relenting in its demands; (4) the time remaining is too short for a dramatic reversal; (5) the “going dark” phenomenon suggests the situation is worse than publicly reported. Polymarket's 37.5% Yes price may be inflated by traders hoping for a diplomatic breakthrough or buying into Trump administration claims, but the on-the-ground reality points to a prolonged disruption.
Risks and uncertainties
- Sudden diplomatic deal: A comprehensive US-Iran agreement could reopen the strait quickly, but the Washington Post argues that no good deal exists.
- Military escalation or de-escalation: A further deterioration could reduce traffic even more; an unexpected ceasefire could boost it.
- Data revisions: The IMF may revise its historical data, potentially bringing a past weekly average above 60 earlier than currently recognized.
- Alternative detection methods: If “dark” ships are eventually captured in IMF data, it could retroactively increase counts.
- Market manipulation: The market could resolve early if a sudden spike occurs—even if spike is temporary.
Conclusion
With traffic at roughly 10-12 ships per day, persistent attacks, no diplomatic resolution in sight, and only four months remaining, the Strait of Hormuz is unlikely to see normal transit levels by December 31, 2026. The Polymarket market’s 62.5% “No” probability appears too low given the gravity of the situation.
This content is for informational purposes only and does not constitute financial, political or investment advice, betting advice, or any operational recommendation.