Strait of Hormuz traffic returns to normal by December 31?

The strongest signal right now is that traffic remains deeply depressed relative to the level needed for a Yes resolution. Recent descriptions of transit activity in the single digits to low teens are not just below normal, they are far enough away from the 60-call 7-day moving average that the market needs a genuine operational reset rather than a modest improvement. Because the resolution rule is based on a sustained seven-day average, one or two better days will not be enough; the data would have to show several weeks of broad-based recovery in commercial shipping activity.

The calendar still gives the market time, but not unlimited time. There are roughly five months left in the year, which is enough for traffic to recover if the security environment improves and shipping firms decide the risk premium is manageable. The counterpoint is that analysts have warned that even after an opening, it can take months to reestablish schedules, reposition vessels, and rebuild confidence. That lag matters because the market does not pay for a formal reopening or a diplomatic thaw; it only resolves Yes if transit calls actually climb to the threshold in the published IMF PortWatch data.

The geopolitical backdrop cuts both ways. Reduced near-term escalation risk supports the idea that ships may eventually return, and prediction markets have recently leaned more optimistic than the current traffic data might justify. But the main bear case is that normalization is not merely a political event, it is an operational one, and the transition from heavily disrupted traffic to a 60-plus moving average is a demanding target. My view is that Yes remains plausible, but the market-implied probability appears somewhat too high given how weak the current baseline is and how much sustained improvement still has to occur.