Iran considers permanent ban on Israeli ships in Strait of Hormuz

Iran is mulling a permanent ban on Israeli ships in the Strait of Hormuz. The market on Trump announcing the lifting of the US blockade by May 31 sits at 85% YES, down from 90% yesterday.

The market reacted sharply to Iran’s proposal. The odds for Trump’s announcement by April 19 dropped to 8% YES, down from 28% a day ago, with $19,688 in USDC trading volume. The $3,849 required to move the odds by 5 points indicates a relatively stable order book despite the sell-off.

The proposed ban has also weighed on predictions for Strait of Hormuz traffic returning to normal, casting doubt on any quick resolution. With the ban signaling re-escalation, odds for traffic normalization by June are likely to face bearish pressure, even if current trading data for that specific contract isn’t available.

Traders should note that the May 31 odds still reflect substantial confidence in a diplomatic resolution. A YES share at 85¢ offers limited upside compared to the April 19 market, where buying at 8¢ could return significantly more if a last-minute agreement materializes. For the May 31 bet to pay off, traders need confidence in successful negotiations within 43 days.

Watch for updates from Islamabad talks or Trump’s Truth Social posts. A shift in Iran’s stance or a US diplomatic move could reprice both contracts quickly.