Strait of Hormuz traffic returns to normal by December 31?

The key issue is not whether the Strait of Hormuz is technically open, but whether IMF PortWatch will publish a 7-day moving average of at least 60 transit calls at any point before year-end. The recent reporting in the prompt suggests traffic remains far below pre-crisis norms, with one Reuters datapoint citing only eight vessels in a day and other trackers describing the route as closed or heavily constrained, which is far short of the level needed to clear the market. Even the more optimistic recent reading mentioned in the prompt, 34 commercial vessels on July 5, is still well below the 60-call threshold and appears insufficient on its own to pull a 7-day average above 60.

Historical context also argues against a quick normalization. Multiple sources in the prompt describe pre-crisis daily traffic in the roughly 88 to 140 vessel range depending on measurement frame, so the contract’s threshold is not simply “open,” but roughly two-thirds or more of normal throughput by the market’s own definition. That means the strait can be open to navigation while still failing this market, especially if ships remain cautious, insurance stays expensive, or rerouting and backlog clearing remain incomplete. Reuters and other reports in the prompt indicate traffic has remained a small fraction of normal volumes, reinforcing the idea that the market is asking for a stronger and more durable recovery than headlines about reopening might imply.

The market price near 51.5% Yes shows traders are split, but I would treat that as somewhat optimistic relative to the described data. A year-end Yes is certainly plausible if the geopolitical situation continues to de-escalate and vessel counts improve steadily through late 2026, but the current pace described in the prompt does not yet show a clear path to a 60+ weekly average. Because the contract resolves on an actual published 7-day average from IMF PortWatch, brief spikes or isolated convoy effects would not be enough unless they are sustained. That makes the threshold harder to reach than a casual reading of “traffic resumes” might suggest.

The strongest case for Yes is that the strait has already been reopened or partially normalized in official statements, and shipping levels could improve faster than recent snapshots imply if security conditions stabilize, mines are cleared, and commercial operators regain confidence. The strongest case for No is that the current traffic level remains too depressed, and the combination of security risk, insurance costs, and operational caution may prevent a sustained average above 60 before December 31. Based on the evidence provided, the No side has a slight edge, though the outcome remains genuinely uncertain because the market is highly sensitive to any sudden improvement in maritime conditions.