Short Answer

Both the model and the market expect average traffic through the Strait of Hormuz on April 1, 2026 to be Above 1, with no compelling evidence of mispricing.

1. Market Behavior & Drivers

This market has exhibited a consistently high probability for a 'YES' outcome, with its price action confined to a very narrow sideways channel. The price has fluctuated between 95.0% and 99.0% since its inception, starting at 97.0% and currently trading at the top of its range at 99.0%. The overall trend is flat, indicating a stable and unwavering consensus among participants. The absence of any significant price drops or spikes, combined with the extremely high probability, suggests the market perceives the resolution event as a near-certainty.
The trading range itself defines the key technical levels for this market. A firm support level has been established at the 95.0% mark, representing the lowest point the market has reached. Resistance is present at the 99.0% ceiling, a level the price has repeatedly tested and currently holds. The total volume of 23,743 contracts traded within this tight range demonstrates significant market participation and conviction. This volume, coupled with the stable and high price, reinforces the interpretation that market sentiment is overwhelmingly confident in a 'YES' resolution, with little to no expectation of a different outcome.
  • Hostile naval interactions escalated in the Strait of Hormuz late 2025.
  • Persian Gulf designated high-risk by JWC; war insurance premiums rose.
  • Iran-Saudi diplomatic ties collapsed, severely impacting regional trade.
  • Iran's nuclear breakout time critically short, increasing regional tensions.
  • US Treasury granted waivers for Iranian oil imports after 2024 election.

2. Price Chart

Historical Price (Probability)

Outcome probability
Date

3. Significant Price Movements

Notable price changes detected in the chart, along with research into what caused each movement.

Outcome: Above 5

📉 April 01, 2026: 12.0pp drop

Price decreased from 27.0% to 15.0%

What happened: No supporting research available for this anomaly.

📉 March 31, 2026: 55.0pp drop

Price decreased from 74.0% to 19.0%

What happened: No supporting research available for this anomaly.

📈 March 30, 2026: 30.0pp spike

Price increased from 45.0% to 75.0%

What happened: No supporting research available for this anomaly.

Outcome: Above 3

📉 March 28, 2026: 13.0pp drop

Price decreased from 87.0% to 74.0%

What happened: No supporting research available for this anomaly.

📈 March 27, 2026: 10.0pp spike

Price increased from 77.0% to 87.0%

What happened: No supporting research available for this anomaly.

4. Market Data

Contract Snapshot

For the "Above 5" market, a "Yes" resolution occurs if the 7-day moving average of daily vessel transit calls through the Strait of Hormuz, as reported by IMF PortWatch, is above 5 on April 1, 2026. Conversely, a "No" resolution is triggered if this average is 5 or below. The market opened on March 11, 2026, closes on April 7, 2026, and has a projected payout date of July 6, 2026, with the outcome verified from IMF PortWatch data.

Market Discussion

The primary discussion revolves around the market's active status, with traders clarifying that despite April 1st passing, the market remains open because the official IMF PortWatch data, which resolves based on a 7-day moving average, will not be released until April 7th. Key arguments include speculative bets on higher traffic for "Yes" outcomes, potentially influenced by geopolitical sentiments like "Let our ships go," while "No" bets express concern about hitting thresholds and rounding. A notable insight is the reminder that the market resolves on a 7-day moving average, not just a single day's count.

5. How Did Maritime Hostilities Intensify in the Strait of Hormuz?

IRGCN Aggressive ManeuversOctober [1] and December [2], 2025
Commercial Vessel Attacks (Feb 2026)Three incidents reported by UKMTO [3]
Missile Incidents (March 2026)Multiple reported targeting commercial vessels [4]
Hostile IRGCN interactions began in late 2025 and continued into early 2026. During Q4 2025, U.S. Central Command (CENTCOM) reported "a series of aggressive maneuvers" by Islamic Revolutionary Guard Corps Navy (IRGCN) vessels in the Strait of Hormuz in October [1], with further aggressive maneuvers noted near a US naval vessel by December 24, 2025 [2]. The hostile interactions persisted into Q1 2026, as an Iranian naval craft intercepted and briefly detained a U.S.-flagged oil tanker near the Strait of Hormuz on January 15, 2026 [5].
Hostilities escalated significantly in frequency and severity during early 2026. The UK Maritime Trade Operations (UKMTO) reported three separate attacks on commercial vessels in the Strait of Hormuz region between February 10 and February 20, 2026. These incidents involved a boarding attempt, a close approach with warning shots, and a small explosion near a vessel's hull [3]. By March 11, 2026, six vessels had been attacked in the Gulf and Strait of Hormuz since early March, including one cargo ship hit by a projectile which necessitated crew evacuation [6]. U.S. officials further highlighted on March 13, 2026, that missile attacks had become a defining risk in the Strait of Hormuz following reports of multiple such incidents targeting commercial vessels [4].
Mounting concerns led to widespread warnings and condemnation in March. Throughout March 2026, UKMTO issued updated warnings regarding an increase in "unauthorized approaches and harassment" of commercial vessels in the Strait of Hormuz [7]. CENTCOM also advised civilians to avoid ports used by Iranian forces by March 28, 2026, due to increased hostile activity [8]. Human Rights Watch condemned these "deliberate attacks on civilian ships" in the Strait of Hormuz and Persian Gulf on March 23, 2026, stating they constituted apparent war crimes [9]. This period overall was marked by escalating IRGCN provocations, including multiple seizures, harassment, and missile threats against shipping [10].
Sources (10)
  1. 1CENTCOM Urges IRGC to Avoid Escalatory Behavior at Sea > U.S. Central Command > Statements Viewcentcom.mil
  2. 2Iran Update, December 26, 2025 | Critical Threatscriticalthreats.org
  3. 3UKMTO reports three attacks on vessels in Straits of Hormuzqcintel.com
  4. 4Missile Attacks Define Strait of Hormuz Risks, Officials Say - USNI Newsnews.usni.org
  5. 5Iranian Naval Craft Intercept U.S Flagged Oil Tanker Near Strait of Hormuzthedefensenews.com
  6. 6Six vessels attacked in Gulf, Strait of Hormuz as war puts merchant ships on front lines | Reutersreuters.com
  7. 7UKMTO warns ships after Hormuz safety incident report updatelogisticsmiddleeast.com
  8. 8Civilians Warned to Avoid Ports Used by Iranian Forces > U.S. Central Command > Press Release Viewcentcom.mil
  9. 9Iran: Deliberate Attacks on Civilian Ships Apparent War Crimes | Human Rights Watchhrw.org
  10. 10Operation Epic Fury: The Strait of Hormuz Crisis Explained | Ronin's Gripsblog.roninsgrips.com

6. What Was US Treasury's Stance on Iranian Oil Sanctions in Early 2026?

Total Waivers Granted5 in Q1 2026 [1]
Illicit Crude Exports (Jan 2026)1.85 million bpd [2]
Illicit Crude Exports (Feb 2026)1.7 million bpd [2]
Following the 2024 US election, the US Treasury demonstrated an increased willingness to grant sanctions waivers for Iranian oil imports. During the first quarter of 2026, a total of five waivers were issued [1]. India received two waivers, each permitting the import of up to 15 million barrels over a 30-day period, while China was granted one waiver for 10 million barrels. Turkey and South Korea also received individual waivers for smaller volumes [1]. This flexibility, particularly the Biden administration's March 2026 decision to grant India a 30-day waiver, notably redirected illicit oil flows from China towards India [3]. This overall posture reflects a perceived relaxation in enforcement, potentially driven by global demand and efforts to manage oil prices [2].
Despite these waivers, the estimated daily volume of illicit Iranian crude exports remained elevated in early 2026. According to the United Against Nuclear Iran's (UANI) February 2026 Tanker Tracker report, which utilizes data from firms like TankerTrackers.com, illicit Iranian crude oil exports reached approximately 1.85 million barrels per day (bpd) in January 2026 [2]. This volume slightly decreased to 1.7 million bpd in February 2026 [2]. These figures represent a significant increase compared to previous years, largely attributed to the perceived relaxation in enforcement and heightened global energy demand [2].
Sources (3)
  1. 1CEPR Sanctions Watch March 2026 – CEPRcepr.net
  2. 2February 2026 Iran Tanker Tracker: War Erupts Amid Elevated Exports | UANIunitedagainstnucleariran.com
  3. 3US waiver on Iran sanctions redirects oil flows from China toward India | Iran Internationaliranintl.com

7. Why Are Persian Gulf War Risk Insurance Premiums Rising?

Risk DesignationListed Area for Hull War, Piracy, Terrorism and Related Perils (effective March 3, 2026) [1]
Premium IncreaseUp to 16 times normal rate [2]
Affected AreasAll Iranian waters, Strait of Hormuz, Gulf of Oman [3]
The JWC designated the Persian Gulf a high-risk "Listed Area." The Lloyd's Market Association (LMA) Joint War Committee (JWC), through its Q1 2026 circular JWLA-033, officially designated the Persian Gulf as a "Listed Area" for Hull War, Piracy, Terrorism and Related Perils, effective March 3, 2026 [1]. This high-risk zone specifically includes all Iranian waters, the Strait of Hormuz, and significant portions of the Gulf of Oman, indicating that vessels operating there are now subject to enhanced risk due to potential conflict escalation [3].
War risk insurance premiums have significantly increased for Strait of Hormuz transits. Following this designation and increased regional tensions, war risk insurance premiums for crude oil tankers navigating the Strait of Hormuz have seen a sharp increase, with some reports indicating rates reaching up to 16 times their usual level [2]. For large vessels, this additional war risk premium can range from hundreds of thousands to over a million dollars per transit, imposing a substantial hidden cost for shippers [4]. This surge reflects marine insurers' heightened perception of risk for commercial shipping in the region [3].
Sources (4)
  1. 1https://lmalloyds.com/wp-content/uploads/2026/03/JWLA-033_Iran.pdflmalloyds.com
  2. 2War Risk Insurance at 16x: The Hormuz Cost [2026] | TheBoard.worldtheboard.world
  3. 3London Marine Insurers Widen High-Risk Zone in Mideast Gulf as Conflict Escalatesinsurancejournal.com
  4. 4LMA - Safety concerns, not insurance availability, driving reduced vessel traffic in the Strait of Hormuzlmalloyds.com

8. How Have Iran-Saudi Diplomatic Ties Collapsed and Affected Trade?

Diplomatic StatusSaudi Arabia effectively cut diplomatic ties with Iran by expelling staff [1]
Diplomatic Staff Expulsion DateAround March 21-22, 2026 [1]
Projected 2025 Trade ImpactSignificant negative impact, pushing GCC economies into recession [2]
Diplomatic relations between Iran and Saudi Arabia have severely deteriorated. Saudi Arabia ordered the expulsion of Iranian diplomatic staff around March 21-22, 2026, instructing an Iranian military attaché and four other embassy staff members to leave the country within 24 hours [1]. This action is indicative of a broader trend suggesting a breakdown in relations, with reports indicating Riyadh has 'cut the last diplomatic line' with Tehran [2]. By early April 2026, sources also reported that Iran had 'lost every Gulf Embassy in 26 Days,' signaling a complete collapse of its diplomatic network in the region [3].
Bilateral trade between Iran and GCC nations faces severe negative impacts. The current geopolitical climate indicates a significant negative impact on trade throughout 2025, rather than growth. The intensifying conflict and the prospect of an 'Iran war' are predicted to push GCC economies into recession [2]. While specific quarter-over-quarter growth rates for bilateral trade throughout 2025 are not available in the provided sources, the overarching context of diplomatic breakdown and regional conflict strongly suggests a substantial decline in trade activity, far from any positive growth.
Sources (3)
  1. 1Saudi Arabia orders Iranian military attache, four embassy staff to leave | Reutersreuters.com
  2. 2Saudi Arabia Expels Iranian Diplomats as War Intensifieshouseofsaud.com
  3. 3Iran Lost Every Gulf Embassy in 26 Days | House of Saudhouseofsaud.com

9. What Is Iran's Nuclear Breakout Time and Policy Shift?

IAEA Breakout Time Assessment (2025)a few days or less in Feb 2025, evolving to in a week by May 2025 (via independent analysis) [1]
US Intelligence Breakout Time (2025)in under a week [2]
Doctrinal Shift (Q1 2026)No explicit public statements from senior Israeli or US defense officials indicating a shift from 'containment' to 'prevention' [3]
Iran's nuclear breakout time was assessed as critically short in late 2025. Publicly available assessments from the IAEA, as interpreted by independent analysis, and US intelligence indicated a very short "breakout time" for Iran's nuclear program during this period. An analysis of the February 2025 IAEA report by the Institute for Science and International Security (ISIS) assessed Iran's breakout time to produce sufficient weapons-grade uranium for a nuclear weapon as "near zero," specifically "a few days or less" [1]. By May 2025, a subsequent ISIS analysis of the IAEA report maintained that Iran "could still break out in a week" by utilizing its stockpile of 60% enriched uranium and further enriching its 20% enriched uranium [4]. Concurrently, US intelligence in 2025 stated that Iran possessed the capability to produce enough uranium for one nuclear bomb in "under a week" [2].
No official shift from 'containment' to 'prevention' was publicly declared in early 2026. Available sources do not provide explicit declarations from senior Israeli or US defense officials in Q1 2026 indicating a doctrinal shift from 'containment' to 'prevention' regarding Iran's nuclear program. While Israeli think tanks and experts discussed the escalating Iranian nuclear threat and the need for new strategies during this period, these discussions did not present official government statements of a policy shift. For instance, an INSS publication in March 2026 discussed principles for an Israeli strategy to address the Iranian nuclear threat, noting that the threat had shifted "from the realm of the distant future to the present" and emphasizing deterrence and denial [3]. Similarly, Israeli experts in January 2026 assessed the conflict with Iran and the nuclear threat, reiterating the urgency of the situation and the short breakout time [5]. These sources contain analyses and expert opinions rather than direct public statements from senior defense officials announcing a change from 'containment' to 'prevention' in Q1 2026.
Sources (5)
  1. 1https://isis-online.org/uploads/isis-reports/documents/Final_Analysis_of_February_2025_IAEA_Iran_Verification_Report.pdfisis-online.org
  2. 2US intelligence says Iran could produce enough uranium for one nuclear bomb in under a weekarmyrecognition.com
  3. 3Principles for an Israeli Strategy to Address the Iranian Nuclear Threat at the End of the War | INSSinss.org.il
  4. 4https://isis-online.org/uploads/isis-reports/documents/Analysis_of_May_2025_IAEA_Iran_Verification_Report_FINAL.pdfisis-online.org
  5. 5Israeli experts assess conflict with Iran and nuclear threat - JNS.org - Jewish News Syndicatejns.org