Short Answer

Both the model and the market expect Strait of Hormuz traffic to return to normal by December 31, with no compelling evidence of mispricing.

1. Market Behavior & Drivers

The prediction market for normal Strait of Hormuz traffic by year-end shows a clear upward trend. Since opening at 49.5% in late July, the implied probability has climbed to a current price of 60.5%. The contract has traded within a range of 46.5% to 63.5%, establishing the lower bound as a potential support level and the upper bound as near-term resistance. The overall price action signals a shift in market sentiment toward a higher likelihood of resolution by December 31.
A sharp 12.0 percentage point spike on August 02, from 46.5% to 58.5%, was the most significant event. This move appears to be a direct reaction to reports from The New York Times and AP News about progress in ceasefire and reopening negotiations. However, the market has zero traded volume. This absence of liquidity indicates that price movements reflect market-maker adjustments to news events, not active positioning by traders. The lack of volume suggests the current 60.5% probability lacks conviction and represents a thin, news-driven market.
  • Yes, Iranian factions exhibit strategic consensus regarding the Strait of Hormuz.
  • Yes, US and allies demand security guarantees for navigation freedom.

Who Wins and Why

Outcome Market Model Why
Yes 60.0% 56.7% Progress toward an Iran ceasefire could lead to normalized transit through the Strait.

Current Context

Strait of Hormuz traffic remains minimal due to conflict and high risk. As of August 6, 2026, maritime traffic through the Strait is at "trickle" levels. This is attributed to ongoing military conflict, security concerns, and war-risk insurance premiums estimated at 30x normal rates [1][2][3][4].
Negotiations for commercial traffic face significant political and internal challenges. Iran and Oman are reportedly negotiating a new framework for commercial traffic, which may include defined inbound and outbound lanes and potential "service fees" [5][4]. However, the situation remains highly volatile due to competing factions within Iran, internal US-Iran tensions, and a draft bill in the Iranian parliament seeking to restrict transit for "hostile" nations [4][6][7][8].
Prediction markets show moderate confidence in traffic normalization by year-end. As of August 6, 2026, prediction markets indicate approximately 62% confidence that traffic will return to a defined "normal" by December 31, 2026 [9][10][11]. Normal is defined as a 7-day moving average of 60 daily transit calls, as measured by IMF PortWatch [9].
Sources (11)
  1. 1Hormuz Traffic at a Trickle as Ship Attacks Heighten Concerns - Bloombergbloomberg.com
  2. 2Strait of Hormuz Status: August 3, 2026 | Straits Daily Briefstraits.live
  3. 3Hormuz Situation Report · Straits | Straitsstraits.live
  4. 4Iran, Oman in final Strait of Hormuz talks; Trump claims...cnbc.com
  5. 5Officials report progress on a deal to reopen the Strait of Hormuz | AP Newsapnews.com
  6. 6Iran Update Special Report, August 4, 2026 | ISWunderstandingwar.org
  7. 7Iranian parliament reviews bill to restrict Strait of Hormuz transitaa.com.tr
  8. 8Why Iran is fighting to keep Hormuz at center of US negotiations - AL-MONITOR: The Middle Eastʼs leading independent news source since 2012al-monitor.com
  9. 9https://polymarket.com/event/strait-of-hormuz-traffic-returns-to-normal-by-december-31/strait-of-hormuz-traffic-returns-to-normal-by-december-31polymarket.com
  10. 10Strait of Hormuz traffic returns to normal by December 31? — Odds & Predictions | PredScopepredscope.com
  11. 11Strait of Hormuz traffic: Will it normalize by Dec 31?chanceindex.com

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.

📈 August 02, 2026: 12.0pp spike

Price increased from 46.5% to 58.5%

Outcome: Yes

What happened: The primary driver of the 12.0 percentage point spike in the "Strait of Hormuz traffic returns to normal by December 31?" market on August 02, 2026, appears to be reports of progress in negotiations to reopen the Strait and secure a ceasefire. News outlets, including The New York Times and AP News, reported on August 3, 2026, about an "emerging deal" between Iran and Oman, and that officials were reporting "progress on a deal to reopen the Strait of Hormuz" [1][2]. This closely coincides with the market's movement, suggesting early reports or rumors of these negotiation breakthroughs likely circulated on August 2nd. Social media activity was irrelevant to this movement, as the provided research contains no evidence of influential social media posts driving the spike.
Sources (2)
  1. 1An Emerging Deal Between Iran and Oman to Reopen...nytimes.com
  2. 2Officials report progress on a deal to reopen the Strait of Hormuz | AP Newsapnews.com

4. Market Data

Contract Snapshot

This Polymarket contract resolves to "Yes" if IMF Portwatch publishes a 7-day moving average of transit calls for the Strait of Hormuz equal to or above 60 for any date between market creation and December 31, 2026. Otherwise, the market will resolve to "No" once data has been published for the final date of December 31, 2026, and the "Yes" condition has not been met. The market can resolve early if the "Yes" condition is satisfied, and data revisions within the timeframe are considered, while obvious data integrity issues may delay final resolution for corrections.

Available Contracts

Market options and current pricing

Outcome bucket Yes (price) No (price) Last trade probability
Yes $0.61 $0.40 60%

Market Discussion

For the Kalshi prediction market on the Strait of Hormuz traffic, traders currently show a 60.5% consensus for normalization by year-end, which means reaching a 7-day average of 60 transit calls. Key arguments for "Yes" focus on ongoing diplomatic talks, the potential for a durable agreement, and previous temporary easements. Arguments for "No" emphasize persistent US-Iran hostilities, vessel attacks, high war-risk insurance costs, and traffic remaining significantly below pre-crisis levels.

5. Trust Index

Octagon Trust Index Polymarket 68 Caution

Largest single print on “Yes” carried 52% of its $5,579 tape (window is 23% of 24h flow)

Integrity risk· Large trades

How it adds up
Integrity80% of score69Caution
Trade quality20% of score63Caution

Includes the cost to trade: a $10,000 order loses about 3% of the price to slippage.

Trust score68Caution

Weighted blend with hard caps — a critically weak safety pillar, or a severe trading anomaly, caps the total regardless of the rest. Full methodology · About the Trust Index

Trust profile
Integrity5 screens run · 4 don't apply · 1 awaiting data
Market integrity
65Caution

Outcome can be influenced

Outcome controlStructural risk · high confidence

Settlement is decided by a token-holder vote.

Large tradesTrade signals · medium confidence

Largest single print on “Yes” carried 52% of its $5,579 tape (window is 23% of 24h flow)

Screened clean
Participant influenceNo conflicted participant detected. Clear
Thin-volume movesNo significant move Clear
Size patternsNo distribution read Clear
1 screen not run
Thin-leg conviction · doesn't apply to this market type
Info fairness
80Good

Structural prior — no screens apply

No suspicious activity on any screen

4 screens not run
Move vs. catalyst · doesn't apply to this market type
Longshot repricing · doesn't apply to this market type
Pre-broadcast certainty · doesn't apply to this market type
Cross-venue timing · data source not connected
Resolution quality
60Caution

Settlement depends on token voting

No suspicious activity on any screen

Resolution rules read: Clear

Settlement is decided by a token-holder vote.

Liquidity
70Tradeable

Fills fine at modest size

1 contract

Yes70
Tradeable · high confidence

Quoted spread 6.1% of price with size at both touches

Move quality
70Stable

No significant moves

1 contract

Yes—
No significant move (6h)

Price was stable over the last 6 hours.

Rule clarity
100Clear

Counts toward Resolution quality, not here

1 contract

Yes100
Clear · high confidence

All checks pass

objective outcome · Clearofficial source · Cleartime boundary · Clear
Trade quality
63Caution

Tradable, but expect execution cost beyond small sizes.

Outcome quality 70 (notional-weighted)

$100 order: 0.5c slippage (~3% of a 16.5c contract)

$1,000 order: 0.5c slippage (~3% of a 16.5c contract)

$10,000 order: 0.5c slippage (~3% of a 16.5c contract)

Yes70Market scoreLiquidity70Move quality–Rule clarity100
Why 70
Liquidity
70 · Tradeable · high confidence

Quoted spread 6.1% of price with size at both touches

Move quality
No significant move (6h)

Price was stable over the last 6 hours.

Rule clarity
100 · Clear · high confidence

All checks pass

objective outcome · Clearofficial source · Cleartime boundary · Clear

underwriting_v1.4 · computed Sep 20, 2026

6. What are the key political or military triggers within Iran that could halt the diplomatic progress on reopening the Strait of Hormuz before December 31?

Current Diplomatic StatusPositive and progressive as of early August 2026 (Iran and Oman) [1][2][3]
Prior Diplomatic OutcomeCollapsed in June 2026 [3]
Key Military TriggerResumption of direct military strikes between the U.S. and Iran [4]
Iranian demands for control and sanctions relief hinder diplomatic progress. Key political and economic factors that could impede diplomatic efforts to reopen the Strait of Hormuz include Iran's demands for territorial control over transit lanes and the lifting of U.S. blockades on its ports [4][5]. Further disagreements concerning the sovereignty and security interests of the involved parties, particularly Iran, also pose a significant risk to ongoing negotiations [6].
Diplomatic efforts show progress but remain highly fragile. Current discussions between Iran and Oman were described as 'positive' and 'progressive' in early August 2026 [1][2][3]. However, the fragility of this diplomatic process is underscored by the collapse of previous efforts in June 2026 [1][2][3].
Resumed U.S.-Iran military strikes could immediately halt progress. A critical military trigger that could halt diplomatic progress is the resumption of direct strikes between the U.S. and Iran [4]. Past instances of such conflicts have historically led to a steep fall in Strait of Hormuz ship traffic [7][5], with broader references to 'the war in Iran' and 'attacks on Iran' emphasizing persistent military concerns [8][9][10].
Sources (10)
  1. 1Officials report progress on a deal to reopen the Strait of Hormuz | AP Newsapnews.com
  2. 2Iran, Oman make ‘positive’ progress on Strait of Hormuz shipping framework: Iran Foreign Ministry spokespersongulfnews.com
  3. 3Strait of Hormuz Deal With Iran Possible Soon, Bessent Saysnytimes.com
  4. 4Proposed Hormuz deal would give Iran control of inbound...reuters.com
  5. 5Strait of Hormuz traffic plunges as US, Iran resume fighting | Shipping | Al Jazeeraaljazeera.com
  6. 6No breakthrough on Strait of Hormuz as Trump halts attack on Iran | US-Israel war on Iran News | Al Jazeeraaljazeera.com
  7. 7US-Iran strikes: Strait of Hormuz ship traffic falls steeplybbc.com
  8. 8Trump Says Talks Are Iran’s ‘Last Chance’ After Threats | Bloomberg Businessweekyoutube.com
  9. 9Trump Considers "Massive" Iran Attack, Imposes New Tariffs | Bloomberg Daybreak: US Editionyoutube.com
  10. 10Trump Talks Up Iran Diplomacy; Chip Rout Deepens on China Competition | Bloomberg Daybreak: US...youtube.com

7. According to maritime logistics experts, what is the realistic timeline for traffic to ramp up from current 'trickle' levels to the 60-transit daily average once a political deal is announced?

Current Daily Transits8-15 per day (early August 2026) [1][2][3]
Normal Traffic Level (Prediction Markets)60 or more daily transits (7-day moving average) [4][5][6]
Time for Full Return to Pre-Crisis Levels3 to 12 months [1][2][3][7][8]
Strait of Hormuz transits are currently minimal, far below normal levels. As of early August 2026, daily transits through the Strait of Hormuz typically range between 8 and 15 vessels per day [1][2][3]. This is significantly lower than the "normal" traffic defined by prediction markets for contract resolution, which commonly refers to a 7-day moving average of 60 or more daily transits [4][5][6].
Initial traffic recovery to "normal" levels remains an open question. Maritime logistics models suggest that, in the event of a political deal, vessel traffic could rise from approximately 15 transits per day to about 40 transits per day over the first 30 days [9]. However, the available information does not specify a realistic timeline for traffic to ramp up from current levels to the 60-transit daily average considered "normal" by prediction markets.
Full restoration to pre-crisis traffic levels will take several months. Experts indicate that a complete return to pre-crisis traffic volumes, which were approximately 88-100 transits per day, will likely require an estimated 3 to 12 months [1][2][3][7][8]. This extended timeline is attributed to various logistical constraints, such as clearing backlogs, de-mining operations, and the slow return of commercial confidence and insurance normalization [1][2][3][7][8].
Sources (9)
  1. 1Strait of Hormuz Status: August 3, 2026 | Straits Daily Briefstraits.live
  2. 2Strait of Hormuz Crossings Rise 8% Week-on-Week, But Dark AIS Activity Remains Elevatedforeignpolicyjournal.com
  3. 3Hormuz crossings drop 70% as traffic shifts to Iran route Strait of Hormuz crossings drop 70% as tanker traffic shifts almost entirely to the Iranian route | Kpler - Jul 23, 2026kpler.com
  4. 4Dear Mr. Kirkpatrick,cftc.gov
  5. 5The Daily View: Place your bets on length of Hormuz disruption ​:: Lloyd's Listlloydslist.com
  6. 6Strait of Hormuz Closed, Day 145 | Live Tracker & Monitorstraits.live
  7. 7The Strait of Hormuz is reopening, but global shipping won’t return to normal for monthstheconversation.com
  8. 8US-Iran deal to reopen Strait of Hormuz— but full container shipping recovery at least three months awayxeneta.com
  9. 9After the deal: Transits could near 50% of pre-war levels After the deal: Transits could near 50% of pre-war levels in 30 days | Kpler -kpler.com

8. How do the publicly stated goals of Iran's moderate government factions compare with those of hardline elements in the IRGC and Parliament regarding the terms for reopening the Strait?

Factional Strategic ConsensusModerate and hardline elements agree on Strait of Hormuz as essential leverage and for regime survival [1][2][3][4]
Factional Tactical DisagreementDisagreement is tactical, concerning negotiations versus military escalation [1][2][3][4]
Condition for Full ReopeningUS must end naval blockade and withdraw from the region [5][6][7][8]
Iranian factions share a strategic consensus on the Strait of Hormuz. Both moderate/pragmatic elements and hardline IRGC-affiliated groups view the Strait as crucial leverage against the United States and vital for regime survival [1][2][3][4]. Their divergences primarily concern tactical approaches, specifically whether to pursue negotiations or military escalation. While ultra-hardline groups like the Paydari Front oppose any direct negotiations with the U.S., they typically lack sufficient institutional power to completely obstruct ongoing diplomatic efforts [1][4].
Iran presents unified terms for the Strait's full reopening. The nation maintains a consistent position that a complete reopening of the Strait of Hormuz requires the U.S. to end its naval blockade and withdraw from the region [5][6][7][8]. Research indicates no differing publicly stated terms for reopening the Strait proposed by moderate versus hardline factions, underscoring a consistent Iranian insistence on these core conditions for full access [5][6][7][8]. As of August 6, 2026, Iran and Oman are engaged in negotiations regarding a potential managed reopening or the establishment of a new security model for the Strait [5][6][7][8].
Sources (8)
  1. 1Iran’s leaders are united over the war but not over what comes next | AP Newsapnews.com
  2. 2Iran Update Special Report, July 11, 2026 | ISWunderstandingwar.org
  3. 3Why Iran is risking so much over the Strait of Hormuzbbc.com
  4. 4Iran Update Special Report, July 28, 2026 | ISWunderstandingwar.org
  5. 5Iran says a deal with Oman to reopen the strait of Hormuz...theguardian.com
  6. 6Live Updates: Iran, Oman deal on Strait of Hormuz getting...cbsnews.com
  7. 7Hormuz Situation Report · Straits | Straitsstraits.live
  8. 8No breakthrough on Strait of Hormuz as Trump halts attack on Iran | US-Israel war on Iran News | Al Jazeeraaljazeera.com

9. What is the methodology and reporting lag for the IMF PortWatch data, and are there alternative real-time vessel tracking sources that could serve as leading indicators?

IMF PortWatch Data Lag3–5 days [1][2][3]
IMF PortWatch Data SourceSatellite-based Automatic Identification System (AIS) vessel movement data [1][2][3]
Alternative Real-time TrackersAISStream, Kpler, and SeaVantage [3][4][5]
IMF PortWatch tracks maritime trade using satellite AIS data. This system employs satellite-based Automatic Identification System (AIS) vessel movement data to monitor chokepoint transits and provide nowcasts of maritime trade. The data from IMF PortWatch typically has a reporting lag of three to five days [1][2][3].
Several alternative sources offer real-time vessel tracking and leading indicators. For real-time vessel tracking and potential leading indicators, alternative providers such as AISStream, Kpler, and SeaVantage are available [3][4][5]. These platforms deliver live AIS feeds, facilitate advanced voyage event detection, and utilize a combination of satellite and terrestrial sensor fusion for comprehensive maritime activity monitoring [3][4][5].
Sources (5)
  1. 1Data & Methodology - IMF PortWatchportwatch.imf.org
  2. 2Nowcasting Country-Level Trade Estimates Using IMF...elibrary.imf.org
  3. 3jo20ow/Obsydgithub.com
  4. 4Ship Tracking | Real-Time Vessel Tracking by Kplerkpler.com
  5. 5Real-Time Vessel Tracking & AIS Data | Ship Insight — SeaVantageseavantage.com

10. What specific security guarantees are the US and its allies likely to require from Iran and Oman as preconditions for endorsing a new maritime traffic framework?

US & Allies StanceRequire security guarantees for freedom of navigation (UNCLOS) [1][2][3]
Rejected ProposalsIran's proposals for oversight and fee collection [1][4][5]
Negotiation StatusIran and Oman negotiating maritime framework as of August 2026 [1][6][5]
The United States and its allies demand security guarantees for freedom of navigation. They insist that any new maritime traffic framework must uphold the principle of freedom of navigation in the Strait of Hormuz, in strict accordance with international maritime law (UNCLOS) [1][2][3]. The U.S. and its partners firmly reject any arrangement that would empower Iran or Oman to impose tolls, manage transit lanes, or restrict international passage through the Strait [1][2][3].
The U.S. and regional partners reject Iran's proposals for control. Specifically, the U.S. and its regional allies have dismissed Iran's proposals concerning its oversight of transit routes and the potential collection of fees [1][4][5]. They view these proposals as attempts to institutionalize control over an international waterway, which runs counter to their strategic interests [1][4][5].
Iran and Oman continue negotiations amid significant disagreements. As of August 2026, Iran and Oman are engaged in ongoing negotiations to establish a new maritime framework, which addresses technical management, transit routes, and security aspects [1][6][5]. However, substantial disagreements persist between the two nations, particularly concerning issues of control and sovereignty over the international waterway [1][6][5].
Sources (6)
  1. 1Officials report progress on a deal to reopen the Strait of Hormuz | AP Newsapnews.com
  2. 2Iran and Oman propose fee plan for Strait of Hormuz, sources saynbcnews.com
  3. 3How Allowing Iran to Charge Ships in the Hormuz Strait Undermines U.S. Strategyjustsecurity.org
  4. 4Iran and Oman swap proposals to manage Strait of Hormuz: What we know | US-Israel war on Iran News | Al Jazeeraaljazeera.com
  5. 5Iran and Oman exchange proposals to manage Strait of Hormuz | US-Israel war on Iran News | Al Jazeeraaljazeera.com
  6. 6Iran, Oman make ‘positive’ progress on Strait of Hormuz shipping framework: Iran Foreign Ministry spokespersongulfnews.com

11. What Could Change the Odds

Key Catalysts

Maritime traffic in the Strait of Hormuz remains significantly suppressed, with transit levels as of August 6, 2026, far below the pre-crisis baseline of approximately 88 daily transits [1][2][3]. This suppression stems from the ongoing conflict between the U.S./Israel and Iran [1][2][3]. The broader Middle East conflict has also led to a cumulative supply loss of over 1.5 billion barrels of oil [4].
Negotiations between Iran and Oman for a temporary reopening of the strait are reportedly in their "final stage" as of early August 2026 [5][6]. However, the success of these talks remains contingent on issues such as the lifting of U.S. blockades and potential obstruction by other parties [5][6].
Prediction markets currently price a 60-65% probability for the normalization of traffic by December 31, 2026 [7][8][9]. Normalization is defined as a 7-day moving average of 60 or more transit calls per IMF PortWatch [7][8][9].

Key Dates & Catalysts

  • Closes: December 31, 2026
Sources (9)
  1. 1Strait of Hormuz Status: August 3, 2026 | Straits Daily Briefstraits.live
  2. 2Hormuz Traffic at a Trickle as Ship Attacks Heighten Concerns - Bloombergbloomberg.com
  3. 3Hormuz Situation Report · Straits | Straitsstraits.live
  4. 4The Oil Market’s Billion-Barrel Problemyoutube.com
  5. 5Officials report progress on a deal to reopen the Strait of Hormuz | AP Newsapnews.com
  6. 6Iran says Hormuz deal with Oman in final stage as Trump signals breakthroughca.news.yahoo.com
  7. 7Strait of Hormuz traffic returns to normal by… 86% Yes · Polymarketexplorer.struct.to
  8. 8DGPredict - Prediction Marketsdgpredict.com
  9. 9Strait of Hormuz traffic: Will it normalize by Dec 31?chanceindex.com