Hormuz Strait Traffic Markets Price Near-Zero Recovery on Kalshi

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Trump said Monday that countries are “on the way” to join a naval coalition to reopen the Strait of Hormuz, but administration officials admit escorts won’t begin until at least month’s end. Kalshi’s traffic markets reflect that uncertainty: the contract requiring ship volume above 50 is priced at a YES bid of 22¢ / ask of 27¢, while the contract requiring volume above 70 sits at 16¢ bid / 17¢ ask — both implying traders see a meaningful recovery as unlikely before the April 1, 2025 resolution date.

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THE SETUP

Iran’s closure of the Strait of Hormuz has stranded roughly 1,000 oil tankers and pushed Brent crude above $105 per barrel, up more than 40 percent since the conflict began February 28. Kalshi’s KXHORMUZTRAFFIC-26APR01 series prices the probability that ship volume through the strait exceeds specific thresholds by April 1. The three-tiered structure — T5 (above 5), T50 (above 50), T70 (above 70) — lets traders bet on how far any recovery might reach.

THE STRATEGY

The spread between contracts tells the clearest story here. The T5 contract, requiring only minimal traffic, is priced at 86¢ bid / 89¢ ask — the market largely expects at least some ships to pass, consistent with the Pakistani tanker that sailed through Sunday and Iran allowing select Indian vessels to transit, though such exceptions remain rare and do not meaningfully contradict the effective near-total closure that has stranded roughly 1,000 tankers. But the T50 contract’s 22¢ bid / 27¢ ask spread, versus T5’s tight 3-cent spread, suggests genuine uncertainty about whether traffic recovers to majority-normal levels. The T70 contract at 16¢ bid / 17¢ ask reflects near-consensus that a broad reopening before April 1 is unlikely. None of these contracts have recorded executed trades, so these prices reflect quoted sentiment only — not confirmed market consensus.

THE PAYOFF

The T50 contract’s wide spread is where the real question lives: if Trump releases his coalition list this week and escorts are announced, that 22¢ bid could move fast. Watch for any named-country commitments or a confirmed escort start date as the catalyst.

CONTRACT NOTES

All three April 1 contracts generally resolve on the first official data release, though individual contracts may deviate from this rule if explicitly stated otherwise in their terms. If no data is published by expiration, Kalshi resolves to the last fair price at its sole discretion, which adds meaningful resolution risk given how disrupted reporting infrastructure may be. This is market commentary, not financial advice. Always verify contract terms and do your own research before placing any trades.

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