Strait of Hormuz traffic returns to normal by August 31?

The core issue is that the Strait of Hormuz is still operating well below the level needed for a Yes resolution. The latest official PortWatch update that surfaced in recent forecasting commentary put the peak 7-day moving average at 35, and subsequent ship-tracking reports in mid-July showed traffic still highly uneven, with some days in the high 40s but also sharp drop-offs and many vessels transiting dark or rerouting. To resolve Yes, the official PortWatch series has to publish a 7-day average of at least 60 at some point before August 31, so the market needs not just a modest improvement but a clear, sustained normalization from current levels.

The recent news flow argues against that kind of rapid recovery. Over the past week, reporting has described renewed U.S.-Iran strikes, tanker attacks, a U.S. blockade on Iranian ports, Iranian threats to stop or control traffic, and repeated warnings that crews are still facing elevated danger. Shipping-industry data and maritime advisories point to reduced traffic, cautious routing, and a material share of vessels turning off AIS signals, all of which are consistent with an unsettled corridor rather than a reopening. Even if some ships are still getting through, the overall environment is still suppressing volumes and making operators reluctant to restore normal schedules.

There is still enough time for a turnaround before the August 31 deadline, and that is the main reason the Yes probability is not near zero. If the ceasefire holds, Iran backs away from direct harassment, and insurers and operators regain confidence quickly, the metric could rise fast because the prewar baseline was well above 60. But that scenario requires more than a pause in fighting; it requires a visible, sustained return of regular commercial traffic for at least a full week. Given the current state of conflict, the latest data trend, and the time needed for shipping behavior to reset, the market’s 10.5% Yes price looks slightly rich rather than cheap. My independent estimate is that No remains the clear favorite.