Strait of Hormuz traffic returns to normal by end of May?

Market-implied probability (Yes ~16%) reflects a common trader view that recovery to a 7-day moving average of 60+ transit calls is unlikely in the remaining days before May 31, and the market has substantial liquidity which suggests informed flow is already priced in. With only eight calendar days left (May 23–31 inclusive) there is a narrow window for any sustained rise in daily calls to move the 7-day average above 60, which requires several consecutive high daily counts or revisions to previously published values within the window.

Structurally, the Strait of Hormuz is normally one of the world’s busiest chokepoints and under baseline conditions the 7-day moving average would often be at or above the 60 threshold, so the core long-term tendency is toward the Yes outcome; that said, the requirement is for IMF Portwatch’s published counts which can reflect operational reporting delays, classification choices, and intra-period revisions (revisions published within the market timeframe are allowed and can create a last-minute qualifying value). The technicalities therefore favor a small possibility of late upward revisions or a short surge in visible transits producing a qualifying 7-day average.

On the downside, ongoing regional security risks (missile/drone attacks, seizures, naval escorts, or insurance-driven rerouting) can suppress visible transit calls quickly and keep the 7-day average depressed; such effects can persist for weeks and are hard to reverse on a short timeline. Conversely, coordinated de-escalation, increased naval protection, insurance improvements, or sudden restoration of commercial confidence could produce a rapid rebound in scheduled traffic—especially for tankers and container ships that cannot economically bypass the Strait—making a short sharp recovery plausible but not likely given the limited remaining days.

Weighing these elements I put moderate weight on mean reversion and data-revision mechanics (which raise the floor relative to the market price) but also substantial weight on the brevity of the time window and the persistence of security/insurance frictions; combining these leads to a ~30% probability that a qualifying 7-day moving average is published by May 31, 2026, with the remaining 70% reflecting the market’s and my judgment that traffic will remain below the threshold for the final published dates.