Iranian-backed militias intensify drone attacks on Gulf states, hitting key targets

Iranian-backed Iraqi militias have intensified drone attacks on Gulf states, hitting targets including Saudi Arabia’s Yanbu refinery and Kuwait’s airport. The odds of Gulf states taking military action against Iran by April 30 are at 8% YES, down from 16% a week ago.

The persistent strikes have moved trader sentiment across multiple markets. The probability of Gulf state military action has fallen, but the potential for broader military involvement by other countries remains. The market for military action against Iran ending by April 1 sits at 100% YES, while shorter-term markets like April 2 have dropped to 8.2% YES amid continued hostilities.

Traders are pricing Gulf state retaliation more cautiously. The April 30 market for Gulf military action shows decreased likelihood, but actual USDC traded is thin at $540, with limited trader conviction. The largest recent move was a modest 1-point drop.

The ongoing attacks keep the broader situation tense even as odds for immediate Gulf retaliation fall. The likelihood of other countries engaging militarily with Iran remains low. The UK strike market is at just 2% YES.

At 8¢, a YES share in the Gulf military action market pays $1 if it resolves by April 30, a potential 12.5x return. That bet requires a significant escalation in the next 10 days.

Watch for official responses from Gulf state leaders or CENTCOM, particularly any military coordination announcements. A shift in rhetoric or confirmed military engagement would move these markets fast.

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