Strait of Hormuz traffic returns to normal by December 31?

The key fact is that the resolution metric is not whether the Strait of Hormuz stays open, but whether IMF PortWatch publishes a 7-day moving average of transit calls at or above 60 on any date before year-end. Recent reporting says traffic is still in the single digits or very low double digits, far below the normal range of roughly 88 to 100 vessels per day cited by vessel trackers and reporting on pre-crisis conditions. That gap matters because the market needs not a marginal improvement, but a major and sustained recovery in the 7-day average.

The strongest argument for Yes is that the Strait remains physically passable and traffic can rebound quickly if regional tensions ease. The recent pattern described by Kpler and other trackers is not a complete shutdown but a selective, cautious flow, which means the baseline for recovery exists. If commercial carriers regain confidence, insurers adjust terms, and military risk declines, the 7-day average could rise sharply over a matter of weeks rather than months.

The strongest argument against Yes is that the current data still looks very depressed, with recent week-on-week figures showing transits collapsing from above 100 to around 25 non-Iranian ship transits in one cited period and even lower daily counts on individual days. A 7-day moving average of 60 requires several consecutive days near normal traffic, not just a one-day spike. Given that shipping behavior is still described as cautious and selective, the more likely near-term path is gradual recovery that may not reach the threshold in time.

Market pricing around the mid-50s suggests traders think a recovery is possible but uncertain. I lean below the market price because the threshold is high relative to current conditions, the recent trend is still weak, and there is no clear evidence yet of a sustained step-change in transit volumes. The main upside risk to this view is a sudden de-escalation or a data revision that lifts the moving average faster than expected, but absent that, No has a modest edge.