Short Answer

The model assigns meaningfully lower odds than the market for traffic through the Strait of Hormuz to be Above 20 (model 63.6% vs market 75.0%). This divergence is driven by reports and maritime intelligence indicating extremely low commercial transits, reinforced by Iran's new transit regulations and shipping companies' resistance.

1. Market Behavior & Drivers

This prediction market has experienced a significant downward trend, with the implied probability of a "YES" outcome falling from a high of 96.0% to its current level of 72.0%. The decline was driven by two sharp price drops on consecutive days. On May 6, the price fell 9.0 percentage points, a move primarily driven by news reports that confirmed extremely low vessel traffic in the Strait of Hormuz. This was followed by a more substantial 15.0 percentage point drop on May 7, which appears to be linked to reporting about minimal vessel movements from the beginning of the market's resolution period. These movements indicate that traders reacted swiftly to incoming information suggesting a severe disruption in maritime activity.
Trading volume patterns underscore the market's reaction to the news. A significant spike in trading volume accompanied the sharp price drop on May 7, suggesting strong conviction among traders selling their positions based on the new information. From a technical perspective, the price has fallen from a resistance level near 96.0% to establish a new potential support level at 72.0%. Overall, the chart reflects a marked decline in market sentiment. While the current price still suggests a "YES" outcome is more likely than not, confidence has been substantially eroded as reports detailed a collapse in AIS visibility and institutionalized shipping controls in the region.
  • Iran's new maritime agency, PGSA, implemented new transit regulations.
  • Reputable sources indicate near-zero AIS-transmitting commercial transits through Hormuz.
  • Extensive 'dark' commercial vessel activity was observed near Hormuz in early May.
  • Maritime visibility significantly deteriorated due to intensified GPS jamming and 'dark vessel' concentrations.
  • Shipping companies likely showed resistance to Iran's new transit regulations.

Current Context

Maritime activity in the Strait of Hormuz appears significantly reduced. As of May 6, 2026, Windward reported a severe collapse in AIS visibility within the Fujairah anchorage area, with only approximately 10 of more than 100 vessels remaining visible. A subsequent assessment indicated no AIS-transmitting commercial transits through the Strait, although some dark vessel behavior, including one vessel performing a U-turn within Oman’s Exclusive Economic Zone, was observed [1]. Earlier, on May 1, Insurance Journal noted that only a single Iran-linked fuel tanker was seen entering the Persian Gulf, with no recorded exits. Over prior days, overall inbound and outbound transits were limited and often restricted to a narrow northern lane approved by Tehran, with the possibility of undercounting due to vessels switching off their signals [2].
Iran has institutionalized control over Strait shipping amid negotiations. On May 7, 2026, AP News reported that Iran established a new agency specifically to control shipping in the Strait of Hormuz [3]. This development occurred concurrently with Iran reviewing a peace deal with the U.S., suggesting a formalization of control efforts during the negotiation period [3].
Prediction markets show divided opinions on Strait of Hormuz traffic. Polymarket’s 'How many ships transit the Strait of Hormuz week of May 4?' market, which resolves around May 10, indicates the current leading outcome of '25–49' transits at 66% crowd probability, while '50–74' transits held 45% [4]. Separately, Kalshi’s market, 'Traffic through the Strait of Hormuz? (5/4 – 5/10) Odds & Predictions', will resolve based on whether the number of transit calls, as counted by IMF PortWatch, exceeds 40 during the May 4–May 10, 2026, period [5].
Sources (5)
  1. 1Hormuz Visibility Collapses as Maritime Tensions Escalatewindward.ai
  2. 2Only Iran-Linked Traffic Moves Through Hormuz Amid Blockadesinsurancejournal.com
  3. 3Iran creates new agency to control shipping in Strait of...apnews.com
  4. 4How many ships transit the Strait of Hormuz week of May 4? Trading Odds & Predictions 2026 | Polymarketpolymarket.com
  5. 5Traffic through the Strait of Hormuz? (5/4 - 5/10) Odds & Predictionskalshi.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.

Outcome: Above 40

📉 May 07, 2026: 16.0pp drop

Price decreased from 53.0% to 37.0%

What happened: The primary driver of the 16.0 percentage point drop in the "Above 40" outcome was likely traditional news reporting indicating extremely low vessel traffic at the beginning of the market's measurement period. A report on May 4, 2026, described only nine vessel movements in the Strait of Hormuz over the preceding 24 hours, noting traffic remained "far below normal" [1]. This data, consistent with late April assessments of near-zero daily transits [2], strongly suggested that the total transit calls for the week of May 4-10 would struggle to reach 40. This news likely led the price move as market participants adjusted their expectations by May 07, 2026. Social media was not identified as a primary driver or contributing accelerant for this specific price movement [3].

📉 May 06, 2026: 18.0pp drop

Price decreased from 70.0% to 52.0%

What happened: On May 06, 2026, the 18.0 percentage point drop in the "Above 40" outcome was primarily driven by traditional news reports confirming extremely low vessel traffic through the Strait of Hormuz. A UK Maritime Trade Operations (UKMTO) Royal Navy monitoring report, published that day, stated that Hormuz traffic had fallen by over 90%, with fewer than 10 vessels daily [4]. This was reinforced by an Economic Times report on the same day about Iran enforcing new "sovereign" transit rules requiring prior permits for vessels [5]. These announcements directly undermined the "Above 40" outcome, indicating a sustained low traffic environment. Social media was not identified as a primary driver based on the available information.

Outcome: Above 80

📉 May 05, 2026: 58.0pp drop

Price decreased from 85.0% to 27.0%

What happened: No social media activity was identified as a primary driver for this price movement, indicating it was irrelevant to the significant shift. The 58.0 percentage point drop for the "Above 80" outcome was primarily driven by the ongoing and confirmed severe restriction of traffic through the Strait of Hormuz [6]. While the U.S. launched "Operation Project Freedom" on May 4, 2026, to escort ships [6], market participants likely reacted to real-time data on May 5 revealing continued low transit numbers, leading to only 7 vessels by May 6 and an observed reduction of roughly 58.5% from normal traffic [7].
Sources (7)
  1. 1Hormuz Records Just Nine Vessel Movements Over Last 24 Hoursmenafn.com
  2. 2Strait of Hormuz Tracker 2026 - Strait of Hormuzhormuzmonitor.com
  3. 3Iran makes social media a key front in war against USkfor.com
  4. 4UK monitoring team says Hormuz traffic has fallen 90% during conflict - Naval Todaynavaltoday.com
  5. 5Iran enforces new 'sovereign' transit rules in Strait of Hormuz; mandates prior permits for vessels - The Economic Timeseconomictimes.indiatimes.com
  6. 6wikipedia.orgen.wikipedia.org
  7. 7windward.aiinsights.windward.ai

4. Market Data

Contract Snapshot

For the "Above 40" market, a "Yes" resolution occurs if the total number of transit calls through the Strait of Hormuz, as reported by IMF PortWatch, is above 40 for the period from May 4-10, 2026, by summing daily counts. If the total is 40 or less, the market resolves to "No." The market closes on May 12, 2026, at 9:00 AM EDT, and will resolve no earlier than that time, once complete data from IMF PortWatch is available.

Market Discussion

Traders are discussing the market's seemingly inconsistent probabilities across different traffic thresholds and the challenge of obtaining real-time data, as official reports are delayed. A strong argument for 'Yes' on the 'Above 20' market emerges from an alternative tracking source (Windward) indicating 23 crossings in the first three days, suggesting the current 75% probability might be too low. Overall, there's confusion regarding the pricing dynamics, with some speculating that liquidity rewards might be influencing bids despite evidence pointing to a high likelihood of exceeding 20 transit calls.

5. What specific enforcement actions has Iran's new maritime control agency implemented since its May 7 formation, and what has been the public response from major shipping lines?

PGSA Formation DateMay 7, 2026 [1][2][3][4][5]
Declaration QuestionsOver 40 questions required [1][2][3][4]
MSC Alternative Route AnnouncementMay 10 [6]
Iran established a new maritime control agency on May 7, 2026. This agency, the Persian Gulf Strait Authority (PGSA), implemented a ‘Vessel Information Declaration’ for all ships transiting the Strait of Hormuz [1][2][3][4][5]. This new administrative scheme functions as a 'vet-and-tax/permission' system, requiring vessels to submit detailed information and obtain specific clearance codes before they are permitted passage [1][2][3][4][5]. Enforcement of these new regulations is directly based on the details provided by vessels prior to their transit [1][4].
The declaration form requires extensive vessel information from operators. The ‘Vessel Information Declaration’ form mandates ships to complete over 40 questions, which must be submitted via email to the authority [1][2][3][4]. Required details include vessel identity, any previous names, and both countries of origin and destination [1][4]. Lloyd’s List characterized this system as a 'toll booth' style operation, involving collaboration between the PGSA and the IRGC, intended to manage limited traffic by directing passage through an IRGC-controlled corridor only after full documentation and clearance codes have been successfully obtained [5].
Major shipping lines have largely refused to engage with this new system. Most shipping companies have confirmed they will not participate in the new scheme, even indirectly [5]. In a notable public response, MSC announced on May 10 an entirely new Europe–Middle East service specifically designed to avoid transiting the Strait of Hormuz [6]. This new service strategy utilizes the Suez/Red Sea, in conjunction with land and truck connections across Saudi Arabia, and feeder links via various Persian Gulf gateways [6].
Sources (6)
  1. 1Iran imposes new rules for Hormuz in effort to cement control of key waterway | CNNedition.cnn.com
  2. 2Iran creates new agency to control shipping in Strait of Hormuz while reviewing peace deal with US | Nation & World | djournal.comdjournal.com
  3. 3Iran creates new agency to control shipping in Strait of Hormuz while reviewing peace deal with US - SRN Newssrnnews.com
  4. 4Iran imposes new rules for Hormuz in effort to cement control of key waterway | CNNcnn.com
  5. 5Tehran’s ‘toll booth’ system is now controlling Hormuz traffic:: Lloyd's Listlloydslist.com
  6. 6MSC Plans Route That Avoids Strait of Hormuz - TTttnews.com

6. How does the IMF PortWatch methodology for counting 'transit calls' differ from AIS-based tracking by firms like Windward, and what are the implications for this market's resolution?

IMF PortWatch Primary DataSatellite-based Automatic Identification System (AIS) data (United Nations Global Platform) [1][2][3][4]
IMF PortWatch Update FrequencyWeekly, typically on Tuesdays [5][1][6][4]
Windward Data IntegrationMulti-sensor fusion including AIS, electro-optical (EO), synthetic aperture radar (SAR), and radio frequency (RF) sensors [7][8]
IMF PortWatch tracks transit calls using satellite AIS data. This system utilizes satellite-based Automatic Identification System (AIS) data sourced from the United Nations Global Platform to count "transit calls" through critical chokepoints like the Strait of Hormuz [1][2][3][4]. A transit is defined as a ship passing a designated boundary, counted once per transit, with a 48-hour threshold before the same vessel is counted again [2]. These estimates are typically updated weekly on Tuesdays [5][1][6][4] and are primarily focused on providing macroeconomic indicators [5][1][3][9].
Windward employs multi-sensor fusion for comprehensive vessel tracking. In contrast to PortWatch, Windward adopts a "multi-sensor fusion" approach by integrating AIS with electro-optical (EO) imagery, synthetic aperture radar (SAR), and radio frequency (RF) sensors [7][8]. This integrated data is then combined with advanced AI and machine learning to deliver "real-time intelligence" [7][10]. This methodology is specifically designed to detect deceptive shipping practices, including AIS manipulation and "dark activity," where vessels intentionally conceal their presence [11][7][10][12][8].
Methodological disparities impact accurate vessel traffic assessment. The difference in methodologies between IMF PortWatch and Windward holds particular significance for prediction markets concerning Strait of Hormuz traffic, especially given reports of reduced vessel movements and an increase in deceptive practices in the region [13][14][15][16]. While PortWatch's AIS-only "transit calls" offer a direct, publicly available metric for openly declared transmissions [5][2][4][13], this approach risks underreporting the true number of vessels. This underreporting is due to known issues like GPS jamming, AIS spoofing, and ships intentionally "going dark" to avoid detection, which are prevalent in the Strait of Hormuz [4][13][8][16]. Windward's comprehensive strategy, by augmenting AIS with other sensors and AI, aims to identify and track vessels attempting to conceal their activities, thereby offering a potentially more accurate, though less publicly accessible, measure of total vessel movement [4][13][8][16].
Sources (16)
  1. 1imf.orgportwatch.imf.org
  2. 2arcgis.com
  3. 3imf.org
  4. 4imf.orgportwatch.imf.org
  5. 5macromicro.meen.macromicro.me
  6. 6macromicro.meen.macromicro.me
  7. 7ship-technology.com
  8. 8windward.ai
  9. 9imf.orgportwatch.imf.org
  10. 10aiting.comaitools.aiting.com
  11. 11windward.ai
  12. 12windward.ai
  13. 13imf.orgportwatch.imf.org
  14. 14statista.com
  15. 15reddit.com
  16. 16imf.orgportwatch.imf.org

7. What evidence from satellite imagery and maritime intelligence sources confirms the extent of 'dark' (AIS-off) commercial vessel activity near the Strait of Hormuz for the week of May 4?

Dark vessels (May 5)146 out of 167 vessels observed near Strait of Hormuz had AIS off [1]
Dark tankers (May 1-4)20-23 dark tankers, including 6-12 VLCCs, near Kharg Island [2]
Dark vessels >100m (May 2)49 out of 62 vessels greater than 100 meters near Hormuz were dark [2]
Extensive 'dark' commercial vessel activity was observed near the Strait of Hormuz during the week of May 4. A significant number of commercial vessels operated with their Automatic Identification System (AIS) turned off, frequently appearing in key anchorages and approaches, indicating widespread non-transparent maritime operations in the region.
The majority of vessels near Hormuz operated without AIS on May 5. Specifically, out of 167 vessels identified near the Strait of Hormuz on that day, 146 were operating with AIS off and appeared dark. These dark vessels were predominantly stationary and clustered in areas such as Bandar Abbas/Qeshm, Fujairah/Khor Fakkan, and the western approach. This prevalence of dark vessels continued, as on May 6, in the Fujairah anchorage, over 100 vessels were present, yet only about 10 were AIS-visible, attributed to shutdowns or GPS jamming [1].
Persistent 'dark fleet' activity involved numerous tankers and large vessels throughout the week. Further analysis from May 1-4 revealed 20-23 dark tankers, including 6-12 very large crude carriers (VLCCs), near Kharg Island operating without AIS [2]. Earlier in the week, on May 2, 49 of the 62 vessels greater than 100 meters identified near Hormuz were dark. Additionally, on the same day, out of 12 total transits through the Strait, one small dark vessel was observed inbound [3].
Sources (3)
  1. 1Hormuz Visibility Collapses as Maritime Tensions Escalatewindward.ai
  2. 2Project Freedom Begins as Dark Fleet Activity Persistswindward.ai
  3. 3No Way Out? Breaking Down the Week 9 Strait of Hormuz Closureyoutube.com

8. What are the known limitations and reporting lags of the IMF PortWatch dataset for the Strait of Hormuz, particularly regarding the inclusion of non-cooperative vessels?

Data StatusExperimental and not considered official [1][2][3]
Update FrequencyMonthly [1][2]
Reporting Lag7 working days for monthly updates [1][2]
The IMF PortWatch dataset, which tracks activity in the Strait of Hormuz, faces significant reporting lags and revisions. Its monitor and nowcasting estimates are experimental and not considered official, meaning the data is subject to revision and reporting lags [1][2][3]. These estimates are updated monthly, typically with a lag of 7 working days, and can undergo weekly revisions [1][2]. This implies that initial transit counts for specific short periods may be revised after publication, and timing mismatches between AIS port entry and official customs clearance can affect data alignment with precise date ranges [1][2][3].
A key limitation of PortWatch is its inability to track AIS-dark vessels. Its reliance on AIS-derived vessel movements means it can miss 'non-cooperative' vessels that intentionally do not transmit AIS data [2][4]. PortWatch documentation points to these AIS compliance gaps, indicating that some vessels purposefully turn off their AIS [2][4]. This inherent vulnerability suggests a systematic undercounting of vessel transits, an issue particularly relevant in areas like the Strait of Hormuz, where reports of Iran-related AIS manipulation and shadow-fleet evasion are consistent with such data limitations [2][4][5][3].
Sources (5)
  1. 1Portwatch monitor.htmldata-download.imf.org
  2. 2How IMF PortWatch Changed Shipping Forecastscontent.ballastmarkets.com
  3. 3https://www.imf.org/-/media/files/publications/wp/2025/english/wpiea2025093-print-pdf.pdfimf.org
  4. 4FAQsportwatch.imf.org
  5. 5Tracking the shadow fleet: How Iran evaded the US naval blockade in Hormuz | Investigation | Al Jazeeraaljazeera.com

9. Which specific news events or data releases on May 6-7 likely caused the significant price drop in the Kalshi market from 96% to 72%?

New Transit RegulationsIran imposed new rules requiring vessels to follow a protocol or risk attack (CNN) [1][2]
Strait of Hormuz Transit (May 7)No ships passed through in the last 24 hours amid rising security risks (Anadolu) [3]
Commodity Ship Transits (May 6)Hit lowest level since the beginning of the war, with 'just one transit on Monday and none on Tuesday' (AFP/Kpler) [4]
New Iranian regulations significantly impacted Strait of Hormuz transits. News and data releases on May 6-7 indicating reduced traffic through the Strait of Hormuz likely caused a significant price drop in the Kalshi market from 96% to 72%. Specifically, on May 7, 2026, CNN reported that Iran introduced new rules, requiring vessels to follow a specific protocol to transit Hormuz or face potential attack, signaling an increase in Iranian control [1][2]. This escalation would generally lead to fewer compliant commercial transits during the May 4-10 contract window.
Transit activity dramatically dropped amid heightened security risks. Further reports on May 7, 2026, confirmed extremely low transit activity. Anadolu reported "No ships pass through Strait of Hormuz in last 24 hours" due to heightened security risks, vessel attacks, and Iran's new regulations [3]. This 'near-zero' movement day mechanically reduced the probability of the contract's transit threshold being met during the May 4-10 period. Earlier, on May 6, 2026, AFP, citing Kpler data, reported commodity ship transits reached their lowest level since the war began, showing "just one transit on Monday and none on Tuesday" [4]. This provided evidence of very low transit calls during the early part of the contract period.
Sources (4)
  1. 1Iran imposes new rules for Hormuz in effort to cement control of key waterway | CNNcnn.com
  2. 2Iran creates new agency to control shipping in Strait of Hormuzapnews.com
  3. 3No ships pass through Strait of Hormuz in last 24 hours amid rising security risksaa.com.tr
  4. 4Commodity ship transits in Hormuz hit lowest level since start of warspacewar.com

10. What Could Change the Odds

Key Catalysts

April 2026 traffic showed a 'stop-start' recovery, with confirmed April crossings rising to 301 but remaining down 90.9% versus April 2025 [1]. Maritime visibility conditions have deteriorated significantly, with intensified GPS jamming, sharp deterioration in AIS visibility, and 'dark vessel' concentrations reported around Fujairah/Khor Fakkan, consistent with persistent operational risk rather than normalization [2]. Prediction-market pricing also implies changing odds around U.S. blockade-lifting narratives, which is directionally bearish for near-term traffic normalization if odds continue to price 'no lift'/continued disruption [3].
Kalshi traders on the Strait-of-Hormuz topic expected 'normal' traffic, defined as crossing 60 using IMF PortWatch data, to return only by late summer/September, with approximately 59% chance by September 1 [4]. Polymarket contracts for traffic returning to normal by May 15 and by the end of May are tied to this IMF Portwatch 7-day moving average threshold [5][6]. Additionally, a Polymarket contract for Iran agreeing to unrestricted shipping through Hormuz by May 31 has a current crowd probability of 18% for Yes [7]. An Iranian '30-day' deadline, based on a May 2 counterproposal to end an Arabian Sea naval blockade, is reported to expire June 1–2, which could create an escalation 'tripwire' [8].

Key Dates & Catalysts

  • Strike Date: May 12, 2026
  • Expiration: August 10, 2026
  • Closes: May 12, 2026
Sources (8)
  1. 1Strait of Hormuz in April: A Stop-Start Recovery Under Persistent Riskpublic.axsmarine.com
  2. 2Hormuz Visibility Collapses as Maritime Tensions Escalatewindward.ai
  3. 3Vessels cluster near Dubai as Iran asserts control over Hormuz straitcryptobriefing.com
  4. 4Strait of Hormuz traffic disrupted until September, Kalshi traders saycnbc.com
  5. 5Strait of Hormuz traffic returns to normal by May 15? Trading Odds & Predictions 2026 | Polymarketpolymarket.com
  6. 6Strait of Hormuz traffic returns to normal by end of May? Trading Odds & Predictions 2026 | Polymarketpolymarket.com
  7. 7Iran agrees to unrestricted shipping through Hormuz by May 31? Trading Odds & Predictions 2026 | Polymarketpolymarket.com
  8. 8Iran's 30-Day Blockade Deadline Creates June Tripwirehouseofsaud.com

12. Historical Resolutions

Historical Resolutions: 13 markets in this series

Outcomes: 1 resolved YES, 12 resolved NO

Recent resolutions:

  • KXHORMUZWEEKLY-26APR26-T90: NO (Apr 28, 2026)
  • KXHORMUZWEEKLY-26APR26-T80: NO (Apr 28, 2026)
  • KXHORMUZWEEKLY-26APR26-T70: NO (Apr 28, 2026)
  • KXHORMUZWEEKLY-26APR26-T60: NO (Apr 28, 2026)
  • KXHORMUZWEEKLY-26APR26-T50: NO (Apr 28, 2026)