Iran closes Strait of Hormuz, complicating US blockade lift talks

Iran’s closure of the Strait of Hormuz has pushed the odds of Trump announcing a US blockade lift by May 31, 2026, down to 78%, from 90% yesterday.

## Market reaction

The April 19 market collapsed to 1.4%, down from 28% yesterday. The largest single move was a 6-point drop at 6:05 PM. The May 31 market dropped 5 points at 12:19 PM, with traders pricing in low odds of near-term de-escalation.

## Why it matters

The term structure shows a 70-point gap between April 19 and May 31, meaning traders see potential for developments over the next 42 days but not sooner. Total volume is $29,602 in USDC traded. The market is thin: only $1,419 is needed to move odds by 5 points, leaving it exposed to large single orders.

The Hormuz closure directly disrupts global energy transit routes and makes a quick diplomatic resolution harder to price in. At 22¢, a YES share on the May 31 market pays 4.5x, but that requires a diplomatic breakthrough within 43 days.

## What to watch

Statements from CENTCOM or the White House on military maneuvers or diplomatic contacts. Changes in operational language or new sanctions would be the clearest signals of a shift.

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