Strait of Hormuz traffic returns to normal by December 31?

The core question is not whether traffic in the Strait of Hormuz improves at some point, but whether the 7-day moving average of ship arrivals reaches at least 60 on IMF Portwatch before December 31, 2026. That is a fairly forgiving resolution standard in one sense, because it only requires one qualifying week, not a sustained return to normal. At the same time, it still depends on ships being reported consistently and on traffic recovering enough to clear a specific numerical bar. With the current market implying roughly a one-in-four chance of Yes, the crowd is clearly leaning toward continued disruption or at least an incomplete recovery by year-end.

Arguments for Yes are rooted in the possibility that shipping patterns normalize faster than market participants expect once near-term security concerns ease. The Strait of Hormuz is structurally important and economically difficult to avoid for many regional and global routes, so traffic can snap back quickly if insurers, operators, and naval-security conditions become more comfortable. Because the market only needs a single 7-day average above 60, a partial recovery, temporary backlog normalization, or a short-lived surge in shipments could be enough to satisfy the condition even if the corridor is not fully stable for the rest of the year.

Arguments against Yes are that traffic disruptions in a strategically sensitive chokepoint can persist well beyond the period when headlines start to improve. Shipping lines are often conservative after elevated geopolitical risk, and the weekly average may lag even if some vessels resume transits. In addition, the market’s cutoff is calendar-based, so if traffic is still rebuilding late in the year there may simply not be enough time for the moving average to cross the threshold before resolution. The absence of fresh news in the prompt also means there is no positive catalyst to justify a large upward revision from the market price.

Overall, the best independent read is that a recovery above 60 is plausible but not more likely than not. The market’s No-heavy pricing seems justified because the event depends on a specific quantitative rebound under uncertain geopolitical and operational conditions. Still, because the bar is not extremely high and because shipping data can normalize abruptly once the environment stabilizes, I would assign a materially higher Yes probability than the current price, but not a majority probability.