Iran's offer to reopen Hormuz meets a sceptical market

The blockade-end contract has shed 17 points since its 22 Sep peak.

In one line: Washington will not announce an end to the Iranian blockade by 31 October. At 31%, traders give Tehran's 7-day plan too much credit.

Iran proposed a 7-day plan to end the war, the New York Times reported on 25 Sep. Under the plan the Strait of Hormuz would reopen and nuclear talks would revive. A day earlier the same paper reported that Secretary of State Marco Rubio said American negotiators had restarted talks on Iran's nuclear programme but had made no breakthroughs.

Polymarket puts 31% on the United States announcing an end to its naval blockade by 31 October. The contract peaked at 48% on 22 Sep and has lost 17 points since, touching 30% on 24 Sep. Over the 7 days it is down 3 points, and it slipped 1.0 point in the last 24 hours. The other contracts in the event draw a steep curve: 9% for an announcement by 30 September and 62% for one by 31 December.

The offer and the price clash less than they seem. The rule pays only if the US government "publicly and officially announces the end, termination, lifting, or suspension" of the blockade, and an offer from Tehran meets no part of that. Washington has a proposal to answer, not a deal to sign, and Rubio's own account on 24 Sep was of talks restarted with nothing agreed. The 62% for year-end shows traders expect the blockade to end, just not in the 37 days left.

At 31%, the blockade-end contract is priced too high; the United States will make no such announcement by 31 October. A fair price is nearer 20%. The best case against: a plan that reopens the strait hands Washington what the blockade was meant to win, and a suspension could follow fast if the White House takes it up. The call is wrong if a US official announces the blockade lifted or suspended before 11:59pm ET on 31 October.

Sources