Strait of Hormuz traffic returns to normal by July 31?

Historical baseline and structural factors: In normal conditions the Strait of Hormuz supports dozens of daily ship transits, and a 7-day moving average at or above 60 is consistent with pre-crisis baseline ranges for mixed vessel types (tankers, general cargo, containers, bulk). Over the last several years shipping volumes have trended toward recovery after pandemic disruptions, and seasonal summer patterns often sustain or slightly boost transits tied to energy and liner schedules, making a one-off rise to a 7-day MA ≥60 plausible within the remaining window to July 31.

Geopolitical and security risks: The principal dampening factor is regional security volatility—periodic attacks on shipping, naval incidents, sanctions enforcement, and insurance-driven rerouting can meaningfully lower transits by diverting traffic or delaying voyages, and such events can occur with little notice and sustain impacts for weeks. Conversely, any de-escalation, improved convoy protection, or temporary mitigation measures (e.g., escorted transits, reduced premiums for assigned routes) would quickly restore confidence and manifest in rising daily calls, which helps the Yes case because the market requires only one qualifying 7-day average within the window.

Market signals and data considerations: The market-implied probability (~56.5% Yes) and sizable traded volume indicate active opinions and some private information priced in, but the spread is narrow enough that new events could swing odds materially; additionally IMF Portwatch’s published series and allowance for data revisions during the window slightly favor eventual qualification since retroactive upward revisions can preserve a previously published qualifying value. The rule that only one date needs to reach the threshold reduces the burden compared with a sustained return to baseline, so I weigh short-term rebounds and data revisions more heavily than persistent long-term recovery.

Timing and probability nuance: With roughly seven weeks remaining, there is sufficient time for either an operational uptick or a disruptive incident to occur, so this assessment places moderate weight on the status quo and seasonal shipping patterns while discounting tail-risk escalations that would push the probability well below 50%. Overall, the balance of factors suggests a modestly higher than market probability for a qualifying 7-day moving average by July 31, but not a dominant likelihood given persistent regional uncertainties.