Strait of Hormuz traffic returns to normal by December 31?

The core issue is that the market is not asking whether traffic improves modestly, but whether the 7-day moving average of arrivals reaches at least 60 at any point before year-end. Recent reporting puts daily transits in the single digits to low teens, with a five-day average near 10 and some days even lower, which is far from the threshold and still much lower than historical normal traffic. That means the market needs not just incremental improvement, but a several-fold increase sustained long enough to lift the 7-day average above 60.

The argument against Yes is that the recent operating environment remains structurally adverse. Diplomacy is stalled, shipowners remain wary of insurance and security risk, and the absence of a credible political or security breakthrough makes a rapid normalization difficult. Even if transits begin to recover, the market requires enough large commercial vessels to return in volume, and the recent reports suggest many of those ships are still staying away. In a market where the current implied probability is already around one-third, the available evidence still leans more toward persistent disruption than a full reset to normal traffic by December.

The argument for Yes is that the threshold is not equal to the full historical baseline of roughly 130 daily transits, but to 60, which is a much lower bar. If there is a ceasefire, a naval-security arrangement, a meaningful reduction in regional tensions, or a rapid shift in insurer and operator confidence, traffic could rebound faster than many expect because the Strait remains a critical route that shippers have incentives to use. The remaining time horizon is also long enough for a sudden policy change or stabilization event to produce a sharp bounce, so the outcome is not impossible even from a very weak starting point.