The US says the main shipping lanes through the Strait of Hormuz have been cleared of Iranian mines. Polymarket still gives normal traffic through the strait only a 33% chance of returning by the end of the year.
That sounds contradictory until you look at what this market actually settles on.
The contract resolves Yes if IMF PortWatch shows the seven-day moving average of transit calls reaching 60 or more on any date before December 31. Before the war, the strait averaged roughly 85 ships a day. Right now, traffic is still running closer to three to five.
So this is not a market on whether the waterway is technically open. It is a market on whether commercial shipping actually comes back.
Strait of Hormuz Traffic Odds
That distinction explains why the contract fell from 38.5% to 33% during the same week US forces said they had cleared the mines.
Clearing the mines was only one part of the problem.
The market has been sliding for most of the summer. Yes traded as high as 87.5% on June 20 and is now down to 33%.
The biggest move came on August 17, when a 60-day US-Iran agreement expired without a replacement. Both sides accused the other of violations, and the contract fell from roughly 43.5% to 33.5% in a single session.
Since then, the disagreement has become less about shipping mechanics and more about sanctions, compensation and the broader political settlement.
Treasury announced a new round of secondary sanctions on August 23 under Operation Economic Outcast, targeting countries that continue doing business with Tehran. Iran responded with threats of retaliation and warned that ship seizures inside the strait were still possible.
That is the kind of risk that matters to commercial carriers even if the physical shipping lane itself is clear.
The Market Briefly Bought The Reopening Story
There was a short-lived rebound on August 25 after Iran and Oman discussed an interim framework for restoring maritime traffic.
The proposal included a temporary joint shipping corridor with a more permanent arrangement targeted within 30 to 60 days. Polymarket jumped from the low-30s back to 38.5% on heavy volume.
Within three days, the entire move was gone.
The Reason Was Iran’s List Of Conditions
The IRGC said reopening would require progress on the blockade of Iranian ports, compensation for war damage and sanctions relief. Those are much bigger political issues than clearing mines from a shipping lane, and none of them appear close to resolution.
That is why the market barely reacted to the US mine-clearing announcement. The mines were visible. The political risk is harder to remove.
Insurance Is Still Telling The Same Story
The insurance market is another reason traffic has not returned.
Before the war, war-risk insurance on ships moving through the strait reportedly cost around 1% to 3% of hull value. That has since climbed closer to 7.5% to 10%.
For a large vessel, that is an enormous additional cost.
Maritime security groups are also still warning about drifting or uncharted mines even after the main transit routes were cleared. Add the risk of seizures or renewed fighting, and a technically navigable lane can still be commercially unattractive.
That helps explain the strange situation today: the strait can be described as “open,” crude can move through under escort, and normal commercial traffic can still remain almost nonexistent.
The Near-term Markets Have Mostly Given Up
Polymarket’s shorter-dated contracts show how little confidence there is in a quick normalization.
August 31 trades around 0.25%, September 15 around 0.65%, and September 30 around 4.5%. That September contract was near 28% only a few weeks ago. October 31 sits around 12.5%, while November 30 is near 21%.
The board is basically saying that each additional month adds some chance of a deal, but most of the remaining probability has been pushed all the way out to December.
That is why the year-end contract still trades at 33% even though the shorter deadlines are close to dead.
“Open” And “Normal” Are Not The Same Thing
President Trump said Friday that the waterway was open and that millions of barrels were moving through it. Treasury Secretary Scott Bessent also pointed to roughly 130 million barrels being guided out over a two-week period. But the Polymarket contract does not settle on barrels of crude.
PortWatch counts actual vessel calls across container ships, dry bulk carriers, roll-on/roll-off vessels, general cargo ships and tankers. An escorted convoy of crude tankers can move a lot of oil without getting the seven-day average anywhere close to the 60-ship threshold.
The US can clear the mines. Oil can move. The strait can technically be open.
And the contract can still settle No if commercial shipping does not come back.
The Trade
I prefer No at 67¢ on normal Hormuz traffic returning by December 31.
The mine-clearing announcement is important, but it solves the physical part of the problem, not the political or commercial one. The contract needs IMF PortWatch’s seven-day average to reach 60 transit calls. Current traffic remains nowhere close to that level, and Reuters reported just seven commodity vessels transiting Thursday versus a 10-day average of 15.
For Yes to pay, you probably need more than an Iran-Oman corridor agreement. Iran is still tying a broader reopening to sanctions relief, compensation and changes to the US blockade, while Washington just launched a new campaign specifically designed to increase economic pressure on Tehran. Those positions are moving in opposite directions.
At 33¢, I think Yes is still pricing too much probability that diplomacy translates into actual normalized commercial traffic before year-end. I would put the chance closer to 20–25%, which makes No attractive around 67¢. If it resolves No, that is 33¢ of profit on 67¢ risk, or roughly a 49% return.
The biggest risk is a real political breakthrough. An agreement that reduces seizure risk, brings insurance costs down and gives commercial carriers confidence to return could move traffic much faster than it looks today. In that scenario, the market would likely reprice well before PortWatch actually reaches 60.
That also creates an opportunity: if another Iran-Oman headline pushes Yes back toward 40–45% without a corresponding surge in actual vessel traffic, I would like the No side even more.
