Strait of Hormuz remains locked down as Iran holds firm on blockade

The Strait of Hormuz is still on lockdown, with only a handful of vessels passing today, far below normal levels. The market for Strait of Hormuz traffic returning to normal by May 15 sits at 13.5% YES, down from 20% yesterday.

## Market reaction

Iran’s firm stance against reopening the strait has pushed confidence lower. The May 15 contract’s odds fell sharply, with traders skeptical about a quick resolution. With 21 days until resolution, the market prices in slim chances of a return to normal traffic. A 2-point spike at 3:48 PM was short-lived and failed to sustain momentum.

The Trump’s Hormuz blockade announcement market shows 53% YES, down from 72% just a day ago. Actual USDC traded in this market is at $95,253 daily. The traffic normalization market’s daily USDC volume is $36,459, with $4,658 needed to move the price 5 points. The blockade announcement market requires $8,975 for a similar move, indicating deeper liquidity. A 5-point spike at 3:50 PM in the blockade market suggests traders reacted to brief optimism before selling back down.

## Why it matters

Iran’s hardline position and the continued blockade weigh on both markets. The 13.5% YES for traffic resumption by May 15 implies traders see little chance of a breakthrough. At 13.5¢, a YES share offers a 7.4x return if resolved YES, but this bet depends on a rapid diplomatic turnaround. The 19-point drop in the Trump blockade announcement market (from 72% to 53% in one day) signals that traders are losing faith in a near-term resolution from the U.S. side as well.

## What to watch

Watch for statements from Iranian officials or CENTCOM’s General Michael Kurilla. Any sign of negotiation progress or a move to clear mines would shift odds. Trump’s next statement on the blockade is another key signal.

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