Strait of Hormuz traffic returns to normal by...?

The most important fact is that current transit activity is still depressed, with recent daily counts in the teens on several days and only occasional periods that look moderately better. That is not close to what is needed for a 7-day moving average of 60 or more, which implies a sustained return to something like normal or near-normal traffic rather than a short-lived bounce. Based on the latest pattern, the market is not pricing in a broad reopening, but rather a continuing disruption with only sporadic movement through the strait.

The timing constraint makes the hurdle even steeper. Because the resolution depends on a 7-day average, the traffic would need to recover very quickly and then remain elevated long enough for the moving average to reflect that improvement before the end of August. In practical terms, that means a credible normalization would need to begin almost immediately and be visible in the published data for several consecutive days. A single diplomatic headline or a temporary surge would not be enough unless it translated into sustained vessel flows.

There is still a non-zero path to Yes if security conditions improve abruptly, insurers and shipowners become more comfortable, and regional diplomacy leads to a genuine reopening of traffic. The market’s small but meaningful Yes price reflects that tail risk. Even so, the base case remains that disruption persists through the deadline because the underlying drivers are operational and geopolitical, and those tend to unwind slowly rather than in a clean all-at-once move. In short, the threshold is high, the clock is short, and the observed data are still far too weak to support a high Yes probability.