Strait of Hormuz traffic returns to normal by end of May?

Prediction markets put the probability at 40%: Strait of Hormuz traffic returns to normal by end of May. Currently, markets are divided (40% YES, 60% NO). HOUSTON, April 23 (Reuters) - Crude futures climbed more than $1 a barrel on Thursday as the conflict between ​the U.S.

What’s Happening

The probability of the Strait of Hormuz traffic returning to normal by the end of May currently stands at 40% YES and 60% NO, reflecting deep uncertainty over the waterway’s status. Since the outbreak of hostilities on February 28, the strait—which previously carried about 20% of daily global oil supplies—has seen a dramatic reduction in vessel transits. Despite a ceasefire extension by President Donald Trump following Pakistani mediation, both U.S. and Iranian forces continue to restrict shipping. On April 22, Iran seized ships after the ceasefire extension, and the U.S. maintains its blockade of Tehran’s ports, keeping traffic at a trickle. Brent crude futures jumped more than $1 a barrel on April 23 as the conflict intensified, underscoring the strait’s critical role in global energy markets. [Kitco, Apr 23]

Recent data shows a slight uptick in activity, but the strait remains far from normal. On April 27, maritime security consultancy Windward reported that traffic was picking up, with more outbound vessels, though overall numbers remain low. TankerTrackers.com assessed that $380 million worth of crude is in U.S. custody and en route to the United States, while $1 billion in oil has been returned to Iran aboard tankers turned around by the blockade. The same day, at least seven ships—mainly dry bulk vessels—crossed the strait, including departures from Iraqi ports and one from an Iranian port, according to Kpler and satellite data. A Russian superyacht also made the crossing, but shipping traffic remains muted, with talks between Iran and the U.S. stalled. [Maritime Executive, Apr 27]

The path to normalizing Strait of Hormuz traffic by the end of May hinges on diplomatic breakthroughs that remain elusive. On April 28, Iran proposed reopening the waterway in exchange for deferring nuclear negotiations with the U.S., but oil prices rose 3% despite the offer, signaling market skepticism. The U.S. Treasury has also placed sanctions on vessels like the LPG carrier LPG Sevan, further complicating the situation. With both sides maintaining dueling blockades and no clear timeline for talks, the strait’s return to normal traffic depends on whether Iran and the U.S. can agree on terms that satisfy their strategic demands—a prospect that remains uncertain as the end of May approaches. [Al Jazeera, Apr 28]

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