Iran re-closes Strait of Hormuz as US-Iran tensions rise

Islamabad has asked Washington and Tehran to extend the ceasefire for two more weeks amid escalating tensions. The odds of the US announcing an end to military operations against Iran by April 30 are at 32.5% YES.

Market reaction

Iran’s re-closure of the Strait of Hormuz adds pressure as negotiations stall. The April 30 ceasefire market sits at 36.5% YES, unchanged from a week ago. The market dropped 4 points yesterday afternoon as traders reacted to Iran’s absence from the talks and the strait closure. The spread between the April 30 contract and earlier dates suggests traders see a narrow window for diplomatic progress, with just 10 days remaining.

Why it matters

The re-closure of the Strait of Hormuz and Iran labeling US demands as “childish” point toward increased friction, not resolution. These moves lower the probability of a diplomatic breakthrough before the April 30 deadline. Buying YES at 32.5¢ pays $1 if the ceasefire is extended by April 30, a 2.74x return. Given the current rhetoric, that wager looks increasingly risky.

What to watch

This market trades $53,050 in USDC daily, but it only takes $6,999 to move the price 5 points, meaning a single large order can still cause sharp swings. The largest move was yesterday’s 4-point drop on Iran’s actions and rhetoric.

Watch for Vice President JD Vance’s negotiations in Islamabad and any statements from intermediaries like Oman or Qatar. Any shift in Iran’s position or US rhetoric could move this market fast.

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