Iran maintains restrictions on Strait of Hormuz, limiting traffic normalization

Iran informed mediators of continued restrictions on the Strait of Hormuz, keeping a lid on traffic normalization. The odds for traffic returning to normal by April 30 dropped to 69.5%, down from 60% 24 hours ago.

Market reaction

Iran’s announcement maintains military ship prohibitions and tolls on civilian vessels. The April 30 market for Strait of Hormuz traffic returning to normal now sits at 69.5%, a near coin-flip that reflects skepticism about a rapid resolution. The May 31 sub-market remains at 90%, meaning traders expect significant easing within the extra month.

Why it matters

In the UK warships through Hormuz market, odds sit at 9.5%. With military ships still barred, UK naval deployment looks remote. That market’s order book is thin: only $427 is needed to shift the odds by five points, which means price moves there reflect individual large trades more than broad consensus.

Iran’s stance limits de-escalation and reinforces the gap between the April and May contracts. The April odds price in Iran’s continued control over the strait, with traders hedging against a breakthrough. A YES share for normal traffic by April 30, priced at 69.5¢, offers a 2x return but requires a diplomatic breakthrough to pay out.

What to watch

Watch for IRGC announcements and US diplomatic moves. A Pentagon statement or change in the US blockade policy could shift odds significantly.

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