Strait of Hormuz traffic returns to normal by December 31?

This market resolves Yes if the 7-day moving average of arrivals reaches 60 at any point before year-end, so the key question is not whether traffic is permanently normal, but whether it can briefly recover enough to cross that line. With no fresh news available and the event still unresolved in late August, the market is implicitly signaling that current traffic is still below the threshold and that the recovery has not yet happened.

The Strait of Hormuz is one of the most economically important shipping corridors in the world, and that structural importance usually limits how long traffic can remain deeply depressed. Even when tensions rise, cargoes do not have many practical alternatives, so operators, insurers, and governments often work to keep flows moving. That makes a 60-call 7-day average a meaningful bar, but not an unreachable one if the present weakness is mostly a temporary security or scheduling effect rather than a true shutdown.

The main reason to stay cautious is that the market still assigns a substantial No probability, which suggests participants believe disruption could persist through December. If military or political tensions remain elevated, shipowners may continue to reroute, delay, or reduce transits, and the 7-day average may never sustainably get back to the required level. Still, there are several months left, and because the trigger only needs one qualifying week, even a partial normalization in autumn could be enough. On balance, I think the current price slightly overstates the chance of a persistent shortfall, but not by a huge margin.