Prediction Markets Signal Prolonged Disruption in Strait of Hormuz Despite Ceasefire

Prediction market data suggests that the critical maritime artery of the Strait of Hormuz will remain restricted for months, despite a recent ceasefire extension between the United States and Iran. The lack of a formal agreement regarding the removal of the U.S. naval blockade or the reopening of the passage has dampened expectations for a swift recovery in traffic flows. On the prediction platform Kalshi, the probability of traffic returning to normal by June 1 has fallen to 42%. Bettors are more optimistic about the summer, assigning a 59% chance of normalization by July 1 and a 61% chance by August 1. Polymarket reflects similar sentiment, with a 45% chance of normal flows by the end of May. Current transit levels remain severely depressed. Data from LSEG indicates that only eight ships crossed the strait on Wednesday—including three oil tankers—a stark contrast to the pre-war average of more than 100 ships daily. This volatility is exacerbated by reports that Iran seized two ships sailing without authorization. Energy markets are reacting sharply to the impasse, with Brent crude trading above $100 per barrel. Ulrike Hoffmann-Burchardi, chief investment officer for the Americas at UBS, noted that a reopening remains elusive as Iranian officials insist the blockade must end first. She warned that a prolonged period of elevated energy prices could weigh heavily on global economic growth. Despite the energy stress, some market participants are becoming more optimistic about the broader U.S. economy. Kalshi bettors have reduced the odds of a 2026 U.S. recession to just under 26%, a significant decrease from the 37% probability seen at the end of March.