Traffic through the Strait of Hormuz? (5/11 - 5/17)
Short Answer
Both the model and the market expect traffic through the Strait of Hormuz will be Above 5, with no compelling evidence of mispricing.
1. Executive Verdict
- Severely curtailed container shipping traffic is expected through the Strait.
- Major container carriers are suspending transits; a U.S. naval blockade persists.
- Diplomatic efforts appear faltering amid ongoing hostilities in the region.
- President Trump rejected Iran's peace proposal on May 11, 2026.
- This rejection immediately increased oil prices and market uncertainty.
Who Wins and Why
| Outcome | Market | Model | Why |
|---|---|---|---|
| Above 10 | 87.0% | 79.5% | Container vessel calls are expected to be low due to carrier suspensions, a U.S. blockade, and ongoing hostilities. |
| Above 100 | 5.0% | 2.5% | Container vessel calls are expected to be low due to carrier suspensions, a U.S. blockade, and ongoing hostilities. |
| Above 30 | 25.0% | 14.7% | Container vessel calls are expected to be low due to carrier suspensions, a U.S. blockade, and ongoing hostilities. |
| Above 25 | 40.0% | 26.2% | Container vessel calls are expected to be low due to carrier suspensions, a U.S. blockade, and ongoing hostilities. |
| Above 15 | 75.0% | 63.0% | Container vessel calls are expected to be low due to carrier suspensions, a U.S. blockade, and ongoing hostilities. |
Current Context
Commercial traffic through the Strait of Hormuz remained severely limited between May 11 and May 17, 2026, with "dark shipping" without Automatic Identification System (AIS) transponders continuing to be prevalent [^] [^] [^] [^] [^] [^] [^] [^] [^] [^] . Observed transits on May 11-12 largely involved Iranian-linked vessels, while reports on May 10 indicated a near-complete halt in outbound commercial vessel movements [^][^][^][^]. Satellite imagery on May 8 showed five inbound vessels in the northern corridor, including tankers and a bulk carrier, as dark tanker movements through Hormuz expanded throughout the week [^]. A notable incident involved the Iraqi crude supertanker Agios Fanourios I, which reversed course on May 11 near a U.S. naval blockade line despite having cleared the Strait over the preceding weekend [^][^]. Some Qatar-linked liquefied natural gas (LNG) vessels saw a limited restart of movement, with one successfully transiting on May 12 after temporarily disabling its tracking transponder [^][^][^]. U.S. Central Command (CENTCOM) reported diverting 62 commercial vessels and disabling four Iranian-flagged tankers since the U.S. blockade began, contributing to war risk insurance premiums surging 30 times above normal rates and rising container freight rates on Asia-Europe routes [^][^][^].
U.S.-Iran relations remained tense, with stalled peace talks and firm stances from both sides. The U.S.-Iran ceasefire, mediated by Pakistan, continued to be fragile, but peace negotiations were stalled after President Trump rejected Iran's latest proposal [^][^][^][^][^][^][^][^]. On May 11, Iranian Foreign Minister Seyyed Abbas Araghchi consulted with his Egyptian counterpart on regional developments [^]. Iran's leadership maintained a strong position, with Major General Mohammad Ali Jafari stating on May 11 that Iran would not negotiate with the U.S. until its terms were met, including an end to the war, lifting of sanctions, release of frozen assets, war damages compensation, and recognition of Iranian sovereignty over the Strait of Hormuz [^]. Iran's Deputy Parliament Speaker, Hamidreza Haji-Babai, declared on May 10 that Iran's policy was "battle with America," not compromise [^]. The U.S. continued to enforce a naval blockade targeting vessels entering or exiting Iranian ports and those carrying sanctioned oil, having disabled two sanctioned Iranian tankers (SEA STAR III and SEVDA) in the Gulf of Oman on May 8 [^][^][^]. The U.S. "Project Freedom," an escort operation launched on May 4, was paused by May 7 to allow time for a deal [^][^][^][^]. The U.S. Office of Foreign Assets Control (OFAC) issued new counter-terrorism and Iran-related designations on May 8 and May 11, 2026 [^]. Kuwait also reported on May 12 that four Iranians, allegedly IRGC-affiliated, confessed to attempting to infiltrate Bubiyan Island, while Iran had seized the JIN LI in the Gulf of Oman on May 8 [^][^]. Internally, Iran was reportedly working to rebuild its security apparatus amidst concerns of renewed public unrest and a struggling economy [^].
Experts noted Strait instability, while prediction markets indicated a low probability of normalization. Experts viewed the Strait of Hormuz as operationally unstable, and analysts suggested that Iran's willingness to "weaponize" the Strait was a key part of its strategy, raising concerns that Iran might be "overplaying its hand" and risking a resumption of full-scale conflict [^][^]. Despite stalled talks, experts on May 11 noted that both the U.S. and Iran were under pressure to reach an agreement, and the ongoing disruptions in the Strait were seen as potentially leading to more pronounced economic impacts, particularly for East Asian economies dependent on Middle Eastern energy imports [^]. Prediction market odds on Polymarket for the Strait of Hormuz "returning to normal" by the end of May significantly declined from 73% in mid-April to 12.5% by May 12, 2026, indicating a strong expectation among traders that normal traffic would not resume [^][^]. Similarly, the probability for normalization by the end of June dropped to 37.5%, reinforcing elevated geopolitical risk premiums in oil markets [^]. While the market for West Texas Intermediate (WTI) Crude Oil reaching $150 in May showed a decreased likelihood, the overall sentiment indicated a low probability of normal shipping traffic in the Strait [^].
2. Market Behavior & Price Dynamics
Historical Price (Probability)
Outcome probability
Date
This prediction market exhibited a consistent and strong upward trend, opening at a high probability of 91.0% and climbing to 97.0% early in the trading period. The market's primary price action was a single, decisive jump from 91.0% to 97.0% on May 12. This movement reflects the market reacting to news that confirmed the initial high probability. The provided context indicates that commercial traffic was indeed severely limited during the resolution week, with reports of "dark shipping" and a U.S. blockade solidifying the market's premise. The high starting price suggests traders already anticipated this outcome, and the price increase represents the market absorbing the earliest reports from the resolution period as confirmation.
The trading volume provides insight into market conviction. The total volume of 241 contracts is relatively low, and the sample data shows the initial trading occurred at the 91.0% level. The subsequent jump to 97.0% appears to have happened on very little volume, indicating that there was no significant disagreement with the market's direction. This low volume suggests that the outcome was widely considered a near certainty, leading to limited speculative interest as the price quickly approached 100%. The 91.0% level acted as a clear support floor, representing the baseline expectation, while the 97.0% level served as a ceiling, reflecting the market's peak confidence.
Overall, the chart indicates an extremely high degree of market confidence that traffic through the Strait of Hormuz would be limited. The sentiment was strongly bullish on a "YES" resolution from the very beginning. The price action was not volatile; rather, it was a swift adjustment from a very high probability to a near-certain one as real-world events aligned with the market's forecast. The market effectively priced in the expected disruption before the period began and then quickly solidified its position as confirmatory news became available.
3. Significant Price Movements
Notable price changes detected in the chart, along with research into what caused each movement.
📈 May 12, 2026: 74.0pp spike
Price increased from 11.0% to 85.0%
Outcome: Above 15
What happened: The provided web research does not indicate any social media activity, traditional news announcements, or market structure events on May 12, 2026, that would explain a 74.0 percentage point price spike for the "Above 15" outcome in Strait of Hormuz traffic. Reports from May 11 describe traffic during the May 11–17 period as largely at a "near halt" or a "trickle," with only rare crossings [^][^]. While "dark shipping" methods may understate total vessel movement, the provided information does not suggest this insight became a sudden driver on May 12 [^]. Consequently, social media activity is irrelevant as a primary driver or contributing accelerant based on the available context.
4. Market Data
Contract Snapshot
This market resolves to Yes if the total number of transit calls through the Strait of Hormuz from May 11-17, 2026, as reported by IMF PortWatch, is above 25; otherwise, it resolves to No. The total is calculated by summing daily counts within this specified period. Trading closes on May 19, 2026, and the market will resolve no earlier than Tuesday at 9 AM following the end of the data period, once complete data is available.
Available Contracts
Market options and current pricing
| Outcome bucket | Yes (price) | No (price) | Last trade probability |
|---|---|---|---|
| Above 5 | $0.97 | $0.05 | 97% |
| Above 10 | $0.94 | $0.12 | 87% |
| Above 15 | $0.83 | $0.24 | 75% |
| Above 20 | $0.60 | $0.49 | 65% |
| Above 25 | $0.54 | $0.54 | 40% |
| Above 30 | $0.30 | $0.75 | 25% |
| Above 40 | $0.15 | $0.88 | 14% |
| Above 75 | $0.09 | $0.95 | 12% |
| Above 100 | $0.13 | $0.92 | 5% |
| Above 50 | $0.15 | $0.87 | 0% |
Market Discussion
Some traders are bullish on traffic through the Strait of Hormuz, placing "Yes" bets on the "Above 30" contract, though they acknowledge the limitations of early-week data. However, market prices currently indicate a lower likelihood for these higher thresholds. Discussion also surfaced regarding the IMF PortWatch data, with one user questioning if its reported low daily counts accurately reflect ship transits or if there's an underlying issue with how vessels are defined.
5. What diplomatic or military developments between the U.S. and Iran could realistically alter the Strait of Hormuz blockade status by May 17?
| Diplomatic efforts by May 17 | Deteriorating [^][^][^] |
|---|---|
| Proposed framework period | ~30 days after signing [^] |
| Project Freedom pause duration | <48 hours [^][^][^] |
Diplomatic efforts to unblock the Strait of Hormuz are faltering. Initial reports indicated a U.S.-Iran framework aimed at ending hostilities and reopening the Strait, which explicitly tied de-escalation to lifting the U.S. naval blockade and easing Iran’s restrictions, with shipping projected to resume within approximately 30 days of signing [^][^][^]. However, as of May 11–12, senior U.S. officials described the ceasefire track as "on life support" after rejecting Tehran’s counter-proposal, which included demands to end the U.S. naval blockade and lift sanctions [^][^][^]. Consequently, the Strait of Hormuz is expected to remain largely blocked or throttled by May 17 [^].
U.S. naval operations to aid shipping were temporarily halted. Operationally, the U.S. launched Project Freedom, a naval initiative designed to assist merchant vessels navigating through Hormuz, but this operation was paused within 48 hours of its commencement [^][^][^]. This pause was reportedly connected to ongoing diplomatic negotiations and the White House’s affirmation that the port blockade would persist [^][^]. A future decision to resume or expand U.S. naval escort or clearing operations holds the potential to increase traffic, even in the absence of a comprehensive ceasefire agreement [^][^].
6. What does recent AIS and satellite imagery data reveal about the actual number and type of vessels successfully transiting the Strait of Hormuz?
| Total Strait transits (May 10) | 17 transits (7 dark) (Windward [^]) |
|---|---|
| Dark vessels in Strait area (May 5) | 146 out of 167 commercial vessels (Windward [^]) |
| VLCC crude export capacity | 2 million barrels per vessel (e.g., Agios Fanourios I) [^] |
Dark transits are significantly increasing within the Strait of Hormuz. Recent data indicates a rise in vessels deliberately suppressing their Automatic Identification System (AIS) signals when transiting the Strait [^][^]. For example, on May 10, intelligence observed 17 total Strait transits, with almost half operating without AIS visibility [^]. A broader assessment from May 5 revealed that 146 out of 167 commercial-sized vessels in the Strait area were operating dark [^].
Vessels operate dark to export oil and evade potential attacks. This trend suggests a pattern of increasing "dark" Middle East oil exports, including crude-laden VLCCs such as Agios Fanourios I and Kiara M, each carrying 2 million barrels of Iraqi crude, which exited the Strait with their trackers off to evade potential Iranian attacks [^]. The VLCC Basrah Energy also reportedly exited dark on May 6 after loading [^]. While overall chokepoint throughput remains significantly below pre-conflict levels, the vessel-type mix is notably tanker-heavy, encompassing VLCCs and large crude carriers, in addition to some cargo and container movement [^][^][^]. Due to this collapse in AIS visibility, the market anticipates very low weekly transit totals [^][^][^].
7. How do the current negotiation 'red lines' of the Trump administration and Iran's leadership compare regarding sanctions relief and maritime access?
| Normal Hormuz daily traffic | 60 crude tankers [^][^] |
|---|---|
| Current Hormuz daily traffic | Near zero (May 2026) [^][^] |
| Iran's demand for sanctions relief | Within 30 days [^][^] |
The Trump administration and Iran's leadership hold vastly divergent conditions for a potential agreement. The United States requires Iran to end uranium enrichment, dismantle facilities, retrieve enriched uranium, halt proxy funding, reopen the Strait of Hormuz without tolls, and establish a regional peace framework [^]. Conversely, Iran's demands prioritize a sanctions lift within 30 days, an end to the US blockade, sovereignty and management over Hormuz, war reparations, and the release of frozen assets [^][^]. Iran has also specified three conditions under which it would be ready to reopen the Strait of Hormuz [^].
These opposing positions have led to a continued stalemate, with no deal reached. As of May 11-12, the ceasefire was reported to be on 'life support' [^][^], and President Trump explicitly rejected Iran's offer on May 11 [^]. Consequently, the Strait of Hormuz remains closed, severely impacting maritime traffic. In May 2026, daily traffic through Hormuz has been reduced to near zero, a stark contrast to the normal average of 60 crude tankers per day [^][^], influencing the May 11-17 prediction market [^][^][^].
8. Which commercial and public sources are most reliable for tracking both AIS-on and 'dark' vessel traffic in the Strait of Hormuz?
| Prediction Market Period | May 11-17, 2026 [^] |
|---|---|
| AIS Data Underreporting | Up to 50% of actual vessel traffic [^][^][^][^][^][^][^] |
| Key Tracking Method | Real-time commercial intelligence platforms [^][^] |
Real-time commercial platforms are essential for tracking Strait of Hormuz vessel traffic. For predicting market outcomes between May 11th and May 17th, 2026, tracking both AIS-on and "dark" vessel traffic necessitates using real-time commercial intelligence platforms like Windward. These platforms offer continuous updates, which is vital given the dynamic nature of the region where vessels may disable or manipulate Automatic Identification System (AIS) transponders. Public AIS data can significantly underreport actual vessel traffic, potentially by as much as 50%, highlighting the limitations of relying solely on public sources [^][^][^][^][^][^][^][^][^].
Specialized commercial sources offer reliable solutions for detecting "dark" shipping. For identifying "dark" activity, which includes vessels manipulating GPS, turning off transponders, or spoofing AIS data, several specialized commercial providers offer reliable solutions. Windward's daily intelligence reports frequently highlight "dark" tanker transits and IRGC fast craft activity [^][^][^]. Spire Global provides a "dark shipping detection solution" to track vessels manipulating positions or disabling AIS [^][^]. Gatehouse Maritime supports dark ship detection through intelligent AIS monitoring [^], and MDA Space's Dark Vessel Detection (DVD) solution integrates various satellite data, radio frequency collection, and geo-spectrum analysis for illicit activity detection [^]. Additionally, AXS Marine and Pole Star Global have documented significant AIS disruption within the Strait of Hormuz [^].
Public sources track AIS vessels, but have dark activity limitations. While valuable for tracking vessels actively broadcasting their positions via AIS, the limitations of public sources are widely acknowledged in high-risk zones where transponders might be switched off [^][^][^][^][^]. For example, Starboard Maritime Intelligence/AMTI is utilized by organizations such as CSIS for visualizing tanker movements based on AIS data [^]. IMF PortWatch data can also offer aggregate daily transit counts, but it may not comprehensively account for "dark" vessels that are intentionally not broadcasting their location [^].
9. What do recent changes in war risk insurance premiums and freight rates indicate about commercial shipping sentiment toward the Persian Gulf?
| War-risk premiums vs. pre-war levels | Up to approximately 8x pre-war levels by late March/early April [^] |
|---|---|
| Current war-risk premium range | 1%–5% of hull value for transit (May 2026 [^][^]) |
| Carrier war-risk surcharges | Up to $3,500 per container (Hapag-Lloyd [^][^]) |
| Strait of Hormuz traffic prediction | 54% probability of fewer than 20 transits (Week of May 11–May 17 [^]) |
Commercial shipping sentiment toward the Persian Gulf remains cautious due to elevated risk perceptions. Although war-risk hull premiums for the Persian Gulf/Hormuz saw a partial decrease, falling from approximately 2.5% in early March to about 1% by late March/early April for a seven-day period, these premiums still represented up to approximately 8x pre-war levels during that timeframe [^]. By May 2026, quoted war-risk premiums for transit through the Strait of Hormuz/Persian Gulf were reported in the range of 1%–5% of hull value, which is significantly higher than the approximately 0.25% pre-conflict for comparable coverage. This indicates persistent insurer caution rather than a temporary disruption [^][^].
Regional risk has been internalized into freight rates, reflected by substantial surcharges. Carriers have implemented significant additional costs, such as a Hapag-Lloyd surcharge of up to $3,500 per container and other emergency surcharges ranging from approximately $2,000 to $4,000 [^][^]. Furthermore, the prediction market for Strait of Hormuz traffic anticipates suppressed transit activity. For the week of May 11–May 17, the market showed a 54% probability that IMF Portwatch would record fewer than 20 transits, consistent with commercial sentiment for continued suppression of Hormuz traffic [^].
10. What Could Change the Odds
Key Catalysts
Several factors contribute to continued market uncertainty and disruption. President Trump rejected Iran's latest peace proposal on May 11, 2026, stating the ceasefire was on "life support," which immediately increased oil prices and uncertainty [^][^][^][^]. Ongoing military incidents, such as the Islamic Revolutionary Guards Corps (IRGC) reportedly firing on a US frigate and forcing a supertanker to turn back near the Strait on May 11, maintain high risk premiums and deter shipping [^]. Brent crude was near $108 per barrel and West Texas Intermediate (WTI) near $102 per barrel on May 12, driven by the ongoing disruption, with prediction markets pricing oil at $150/bbl by August [^][^][^]. The Strait has been under a "RESTRICTED" status since February 27, 2026, following the onset of the US-Israel war with Iran, and daily commercial vessel transits plummeted by as much as 94% in early May [^][^]. The US naval blockade of Iranian ports and continued "Economic Fury" sanctions campaign targeting IRGC oil sales further contribute to market uncertainty [^][^][^][^].
Conversely, potential for normalization exists. An earlier "US-Iran nuclear framework agreement" in early May 2026 had initially led to a sharp increase in prediction market conviction for a return to normal shipping volumes [^]. The ratification of any framework agreement by Iran's parliament is identified as a key variable for the recovery of shipping [^]. Indirect negotiations, mediated by Pakistan, are underway to end the war and establish a framework for nuclear talks [^][^][^][^]. A meeting between US President Trump and Chinese President Xi Jinping is scheduled for May 14-15, 2026, where Iran is expected to be a topic of discussion [^][^]. Despite current disruptions, prediction markets indicate an 81% chance that a seven-day moving average of 60 transit calls for the Strait of Hormuz will be reached by December 31, 2026, suggesting an expectation of eventual recovery, though the probability of normalization by May 15, 2026, was only 1% [^].
Key Dates & Catalysts
- Strike Date: May 19, 2026
- Expiration: August 17, 2026
- Closes: May 19, 2026
11. Decision-Flipping Events
- Trigger: Several factors contribute to continued market uncertainty and disruption.
- Trigger: President Trump rejected Iran's latest peace proposal on May 11, 2026, stating the ceasefire was on "life support," which immediately increased oil prices and uncertainty [^] [^] [^] [^] .
- Trigger: Ongoing military incidents, such as the Islamic Revolutionary Guards Corps (IRGC) reportedly firing on a US frigate and forcing a supertanker to turn back near the Strait on May 11, maintain high risk premiums and deter shipping [^] .
- Trigger: Brent crude was near $108 per barrel and West Texas Intermediate (WTI) near $102 per barrel on May 12, driven by the ongoing disruption, with prediction markets pricing oil at $150/bbl by August [^] [^] [^] .
13. Historical Resolutions
Historical Resolutions: 20 markets in this series
Outcomes: 1 resolved YES, 19 resolved NO
Recent resolutions:
- KXHORMUZWEEKLY-26MAY10-T80: NO (May 12, 2026)
- KXHORMUZWEEKLY-26MAY10-T60: NO (May 12, 2026)
- KXHORMUZWEEKLY-26MAY10-T40: NO (May 12, 2026)
- KXHORMUZWEEKLY-26MAY10-T250: NO (May 12, 2026)
- KXHORMUZWEEKLY-26MAY10-T200: NO (May 12, 2026)
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