The United States has continued its military pressure on Iran, marking the ninth consecutive day of airstrikes aimed at mitigating Iranian attacks on shipping routes and reopening the strategic Strait of Hormuz. This military campaign, part of Operation Project Freedom, targets infrastructure to compel Tehran to halt its closures of the vital waterway. The conflict, which began earlier this year with joint U.S.-Israel airstrikes, has seen heightened tensions and retaliatory actions from Iran, including missile and drone strikes on U.S. bases in the Middle East. The ongoing military engagements have kept the operational status of the Strait contested, despite the Iranian Revolutionary Guard Corps’ previous declaration of its closure.

Key Takeaways

• Ongoing U.S. airstrikes appear to support a scenario where Iran may implement a full airspace closure, as tensions escalate.
• Market pricing for an Iran full airspace closure by July 31 suggests increased likelihood, currently at 25.5% YES, reflecting heightened military threats.
• The pricing trend for airspace closure by August 31 has also increased, indicating continued market anticipation of escalating conflict.

What to Watch

Observers should monitor the Civil Aviation Organization of Iran and Iranian State Television for any official statements regarding airspace closures. Developments such as a formal Notice to Air Missions (NOTAM) announcing a closure would be consistent with increasing YES probabilities. Conversely, any de-escalation indications from President Trump or reopened airspace reports could influence market perceptions toward a NO outcome. Markets will likely react to updates on U.S. military actions and Iranian responses in the coming days.

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