Traders doubt the Iranian blockade lifts this year

The December contract trades at 38%, below last week's 45% despite a late bounce.

In one line: Washington will not officially end or suspend its naval blockade of Iran before 31 December, and the 38% year-end price is too high.

Traders on Polymarket cut the chance of a US announcement ending the Iranian naval blockade by 31 December from 45% on 12 Oct to 38% on 19 Oct. The contract touched a low of 34% on 16 Oct and has since recovered, gaining 3.1 points in the last 24 hours by the venue's own figure. At the last digest, on 14 Oct, it stood at 42%.

The other contracts in the event price the odds lower as the deadline shortens. The October contract trades at 7% and the November contract at 21%. Traders give an announcement little chance before November, and the year-end contract at 38% prices nearly twice the odds of the November one. The blockade dates from 13 July, when President Donald Trump said the United States would reinstate it against Iranian ships and their customers.

The week's slide and the ladder of sibling prices point the same way: traders do not expect the blockade to end before December. The rule is generous to the yes side, since it pays on any official announcement of an "end, termination, lifting, or suspension", so even a temporary pause would count. Traders have marked the contract down despite that, and the bounce from 34% leaves it well below the week's high. The USO oil fund rose 3.05% on Friday 16 Oct, and a blockade on Iranian ships and their customers cuts Iranian supply, which supports crude.

Washington makes no official announcement ending, lifting or suspending the blockade by 31 December, and the 38% price still overstates the chance. An official US statement ending or suspending the blockade before 11.59pm ET on 31 December would prove this call wrong. If the blockade holds through December, Iranian crude stays off world markets into the new year.