Hormuz traffic still seen below normal into the new year

Traders give a normal Hormuz by December 31 a 23% chance, off Friday's 31% peak.

In one line: IMF Portwatch will not log a 7-day average of 60 Hormuz transit calls by December 31, and the 23% price still overrates a normal strait.

Traders on Polymarket cut the chance of normal Hormuz traffic by December 31 to 23%, down 5.0 points in the last 24 hours, after the contract touched a 7-day high of 31% on 25 Sep. Over the 7 days it is still up 5 points, from 18% on 19 Sep, and it sits 6 points above its low of 17% on 20 Sep.

Normal has a precise meaning here. The contract pays if IMF Portwatch publishes a 7-day moving average of "Arrivals of Ships" for the strait "equal to or above 60 for any date between market creation and December 31, 2026". The shorter contracts in the same event set the pace. The September contract trades at 1% and the October one at 6%, so traders place most of the chance of recovery in the last two months of the year.

The week's gain is thinner than it looks. The 8-point fall since 25 Sep undid most of it, and the October contract, at 6%, sits far below the 15% that the last digest, on 23 Sep, named as the sign of a real reopening. That digest called the jump to 25% too high and expected a drift towards 18%. The price has held above that mark, which is the part of the reading that was wrong. A December payout still needs traffic to reach a full 7-day average of 60, and the October price shows traders expect little of that recovery by the end of next month.

Portwatch's 7-day average of Hormuz transit calls will not reach 60 on any date by December 31, and the 23% price overrates a normal strait. The best case the other way is that a single strong week is enough to pay, and Friday's spike to 31% shows how fast traders move on any sign of one. The call is wrong if Portwatch publishes a 7-day average of 60 or more before the year ends, and the October contract above 15% by 15 October would be the early warning. The stakes reach beyond the contract: the tankers and cargo ships that make up the count keep passing the strait in reduced numbers into the new year.