Tyler Jacobsma is the founder of Flowframe.xyz, which provides in-depth content and tools for prediction market traders.
The Strait of Hormuz has been effectively closed since March 2. Nearly 20% of the world's oil supply flows through the Iran-controlled waterway, but right now, traffic is down 95%. Only 16 ships crossed the strait in the past seven days. Before the war, that number was over 100 per day.
There is a Kalshi market asking when will traffic at the Strait of Hormuz will return to normal, and traders don't think it's reopening anytime soon.
Read that again. There's only a coin-flip chance that normal shipping resumes before June, and a two-in-three chance it's still disrupted on May 1 — more than five weeks from now.
This market has been climbing steadily since it opened. Every time traders price in a resolution, the timeline pushes further out.
"But I've heard some ships are getting through. Isn't it opening back up?"
Sort of. Iran went from "we'll set any ship ablaze" on March 2 to "the strait is open, but closed to our enemies" by March 20. A handful of ships from China, India, Pakistan, and Turkey have been allowed through on a case-by-case basis, sailing through with advance permission from the IRGC.
But "a dozen ships a week with Iranian government approval" is not "normal traffic." Normal traffic is 100+ ships a day moving freely. We're nowhere close to that.
If you're curious about this market and want to get involved, use our Kalshi promo code to get started.
Here’s Why This Isn’t Resolving Quickly
- Iran didn't need a navy to close the Strait of Hormuz. It used drones.
This has defense analysts losing sleep. Iran didn't deploy a naval blockade. It didn't lay mines (though reports suggest it's preparing to). It simply flew cheap drones at ships and let the insurance market do the rest.
War risk insurance was pulled for the Strait of Hormuz on March 5. Without insurance, ship owners won't send vessels through. It's an insurance-driven shutdown, not a military one. And insurance doesn't come back until the shooting stops — and stays stopped for a while.
- The workarounds aren't enough.
Saudi Arabia is rerouting oil through the East-West pipeline to the Red Sea port of Yanbu. The UAE is pushing oil through the Abu Dhabi pipeline to Fujairah. However, these alternatives can't replace the full volume that normally flows through Hormuz.
And the workarounds keep getting hit too. Drones struck Oman's Duqm and Salalah ports. A fire temporarily halted oil loading at Fujairah. Kuwait's refineries were struck on March 19, disrupting about 10% of global jet fuel exports.
- The "selective blockade" is a mess.
Iran's new system, where ships register with the IRGC for permission to transit, sounds like a path to reopening. In practice, it's chaos. At least 16 vessels have been hit in waters near the strait since the war started. The attacks appear "random and without a clear pattern," according to maritime analysts at Windward.
Roughly 400 ships are parked in the Gulf of Oman right now, waiting to get through. Most shipping companies have rerouted around the southern tip of Africa instead. That adds weeks to delivery times and millions to shipping costs.
Trump Says A Deal Is Forming. Iran Says It Isn’t
Here's where things get complicated.
On March 23, Trump announced a five-day pause on planned strikes against Iranian power plants, saying the U.S. had reached "major points of agreement" with Tehran via back-channel talks run by Jared Kushner and Steve Witkoff, reportedly through Iran's parliament speaker and intermediaries in Egypt, Pakistan, and Turkey.
Trump's claimed points of agreement:
- Iran will not pursue nuclear weapons or enrich uranium, and will hand over existing stockpiles
- Iran agreed to reopen the Strait of Hormuz
- A possible in-person meeting is being arranged in Islamabad
Within hours, Iran's Foreign Ministry issued a flat denial. A senior Iranian security official called Trump's announcement "psychological warfare designed to calm energy markets" and said, "there is no negotiation." Iran also warned that if the U.S. attacks power plants, critical infrastructure across the Persian Gulf "could be irreversibly destroyed" — and threatened to mine the entire Persian Gulf.
Markets didn't wait for Iran to respond. The Dow jumped 1,076 points, and oil fell sharply after spiking to $112 per barrel on Friday. The five-day pause runs out around March 28.
The credibility gap is massive — Trump says a deal is close, Iran says there are no talks. Maritime analysts, the people who actually move ships, say transiting Hormuz is "completely off the charts for the rest of 2026," regardless of what politicians say on either side. Insurance underwriters don't reopen for a strait where drones are still flying.
Here's the thing about insurance-driven shutdowns: they don't end when a politician holds a press conference. They end when actuaries are satisfied that the risk is gone, and that requires sustained calm, not a five-day ceasefire window with Iran simultaneously threatening to mine the Gulf.
The Trade I'm Watching
The Kalshi "Before June 1" market is sitting at 56% — a coin flip on paper, but not in practice.
Here's the problem with that number: Trump says Iran agreed to reopen the strait. Iran's Foreign Ministry says there are no negotiations. Those two things can't both be true. And maritime analysts say Hormuz is "completely off the charts for the rest of 2026" regardless of what either side says.
Insurance underwriters don't reopen coverage because a politician held a press conference. They reopen when drones stop flying and stay stopped. That hasn't happened. The IRGC is still running drone operations. The U.S. is still deploying two Marine Expeditionary Units and 82nd Airborne elements to the region. You don't send that kind of firepower to a conflict you expect to resolve by next Tuesday.
My read: Iran's denial is closer to the truth. The five-day pause is a tactical move, Trump is buying time, markets are calming down, and oil is dropping temporarily. The structural barriers to reopening (insurance, IRGC operations, damaged infrastructure at Fujairah and Duqm) don't dissolve in a week.
The Play: Bet "No" on the Strait of Hormuz reopening before June 1 on Kalshi. At 56% yes, you're effectively getting 44 cents on the dollar on a bet I think is worth closer to 60–65 cents.
March 28 is the date to watch. That's when the five-day pause expires. A deal framework announcement closes this trade. A breakdown in talks validates it. Either way, holding through that date is how this resolves.
What This Means for Your Wallet
"Ok, ships can't get through a strait I've never heard of. Why does this matter to me?"
Because the Strait of Hormuz is connected to basically everything you buy.
Gas prices. Brent crude went from $70 before the war to $126 at its peak. It's hovering around $90–100 now. The national gas average is $3.58 and climbing. Kalshi's gas market gives a 60% chance that prices will top $4 this month. California is already above $5.
Airfares. Jet fuel costs have spiked. Kuwait's refinery strikes took out 10% of global seaborne jet fuel supply. Airlines are raising fares. If you haven't booked summer travel, you're paying a war premium.
Food prices. The strait is a major route for fertilizer and agricultural inputs. Food prices were already up 3.1% year-over-year in February. If the Strait stays closed through planting season, grocery bills go higher.
Inflation. Kalshi's March CPI market is at 0.8% — more than double January's print. The longer the Strait of Hormuz stays closed, the longer oil stays elevated, and the longer inflation stays hot. That means the Fed can't cut rates. Kalshi has a 98% chance the Fed holds at its next meeting and a 34% chance the U.S. enters a recession this year.
The big picture: This is the largest disruption to global energy supply since the 1973 oil crisis. That's not hyperbole; multiple analysts say that. The 1973 embargo lasted about five months. Kalshi traders are pricing in a good chance that this one stretches past two.
