A few weeks ago we published a guide to the Hormuz recovery markets. These contracts resolve based on the seven-day average of daily transit calls published by IMF PortWatch. This update covers what has happened since, and where the prices now stand.
Where the settlement number currently stands: PortWatch’s most recent published day is August 23: 3 transits. The seven-day average was about 5.0.
How prices have moved: Traders cut the probability of a fast reopening and raised the probability of a slow one. Polymarket’s December 31 contract traded at 62.5% on August 4. It now trades near 33%. On Kalshi, October is mid-single digits, January 2027 near 30¢, April near 51¢, July near 61¢. Three weeks ago January was the contract closest to 50¢; now April is.
Why PortWatch undercounts the strait
PortWatch is built on AIS. Since May, US Central Command has been escorting tankers through the southern strait on routes close to Oman, the New York Times reported. Ships on that run “typically turn off their transponders to avoid detection by Iran.” Bloomberg describes the same shuttle: US help, AIS off, millions of barrels a day still leaving.
Because a dark escorted transit never crosses PortWatch’s boundary, it doesn’t feed the seven-day average. You can see the gap in the variance across sources:
Kpler counted five vessels crossing on Tuesday.
PortWatch’s last published day, August 23, showed three.
On Thursday Trump said 24 tankers had transited overnight with US assistance.
Traders told Bloomberg that 6–8 million barrels a day of crude are now getting out. (Still about half pre-war.)
CENTCOM told the Times it had helped more than 1,000 ships as of August 19;
Capt. Tim Hawkins told CNBC on August 21 the tally was about 1,300 vessels and more than 660 million barrels since early May.
The question that matters to traders is what happens to the gap when a deal arrives. After the June 17 memorandum, PortWatch’s daily count reached 44 within about a week and the seven-day average went from 3.14 to 26.71 in thirteen days.
Visible traffic has recovered quickly once. After the October 2025 Gaza ceasefire, when the Houthis signaled a halt to Red Sea attacks, Maersk ran a single test voyage and analysts said a real return needed “a series of further assurances.” Hormuz’s extra complication is that the escort program is now the established way through. If operators keep sailing dark after a communiqué, PortWatch recovers more slowly than the water it measures, and near-dated contracts can suffer for it.
Insurance operates separately from both the diplomacy and the transponder decision; however, it can also serve as a useful signal. Large shipping companies have said they will stay away until there is a lasting cease-fire, and their underwriters price the same conditions. Pre-war hull war-risk ran about 0.25 percent of hull value; wartime quotes surged as high as 10 percent at their peak, and current market estimates put the range at 3 to 8 percent for Hormuz transits, according to Marsh brokers.
After the June memorandum, the Financial Times reported premiums dropped from about 5 percent of a ship’s value to about 2 percent (reprinted here); attacks pushed quotes back up. Our read is that as long as there are disputes surrounding the mines, the blacklist stands, and ships are being hit, it’s unlikely any repricing will occur.
What an Iran–Oman deal would and wouldn’t do
On August 25 the Iranian and Omani foreign ministers met in Tehran. Their joint statement described a “phased framework” that covers a temporary shipping lane and coordinated mine clearing. It announced no agreement and mentioned no fees. The next day IRGC spokesman Hossein Mohebbi claimed, via Iranian state media, agreements on water and revenue shares. That claim could not be verified with either government, and a senior Iranian source told Reuters the deal “has not been finalised.”
On Thursday morning, Defa Press, a news outlet run by Iran’s armed forces reported that Iran and Oman have reached an understanding on the corridor. Under the reported plan, the US-backed southern route would be formally closed and the change notified to the International Maritime Organization, with talks to replace the 58-year-old traffic separation scheme taking a further 30 to 60 days.
The conditions are that the US must lift the blockade, release frozen funds, impose no new sanctions, and refrain from increasing its military deployment in the region. Iran says it will not act until it sees the US actually doing these things. Note who is speaking: Iran’s military media. Oman has confirmed none of it. And note the second condition against the calendar — “no new sanctions” was announced three days after Washington imposed new sanctions.
The same day, Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani met Foreign Minister Abbas Araghchi in Tehran. Qatar’s Foreign Ministry said the meeting “touched on the ongoing discussions regarding the proposed phased framework, which includes the establishment of a temporary joint navigational corridor through the Strait of Hormuz.” Pakistan’s foreign ministry, whose army chief visited Tehran earlier in the week, said there was “momentum” toward reopening but that it comes down to “a sovereign decision that is to be taken in Tehran and Washington.”
Qatar is the first government other than Iran to name the framework, but this is not the same as confirming its terms.
Even the strongest version of the deal has three documented problems.
Iran says it does not reopen the strait, and now the US says the same. Normalization -- Iranian officials say -- still requires the US to lift sanctions, end the blockade, and unfreeze assets -- “none of which the US has signaled it’s ready to do.” Iran’s deputy foreign minister added Thursday that ending the war “in a permanent and sustainable manner on all fronts, including Lebanon” is also a condition. The anonymous US official’s “no deal without Trump pulling the blockade” is the same statement from the other side.
As drafted, the deal shuts the routes that currently carry the oil. Bloomberg’s account of the Fars draft puts entry under Iranian management, exit under joint oversight, and traffic through a single “central corridor,” with the “two other routes that are currently in limited use” -- the US-protected southern routes -- to cease. Thursday’s Defa Press report makes the replacement explicit, saying that the southern route “would be formally closed” and notified to the IMO. The draft also proposes barring US and Israeli ships and a fee structure for insurance and environmental costs. Washington’s position is that any temporary routes “won’t be subject to approvals, permissions, tolls or charges.” The draft does not add escorted traffic to an Iranian corridor. It replaces escorted traffic with a corridor the US has already rejected.
Two bottlenecks remain after any signature. Approval still has to reach Supreme Leader Mojtaba Khamenei, who has been in hiding since February; Iranian officials say communicating with him takes time. And, currently, the presence of mines is a disputed fact: Trump says they are gone -- adding Thursday that the US has destroyed two boats laying new mines -- while Iran says only its officials know the locations; and the IMO head said last week there was no confirmation of removal. Iran’s deputy foreign minister called US mine-hunters “very good targets.”
Bloomberg’s market summary matches the price action. The talks are the most constructive development in some time, and a temporary corridor is still a long way from a normal reopening. Brent fell about 7% on the week, then edged back up to about $87.36 on Thursday. December Hormuz contracts rose a few points. The 2026 Kalshi dates barely moved.
On August 24, Politico reported, Treasury Secretary Bessent announced “Operation Economic Outcast”: 60 designated entities, new authority over five sectors of Iran’s economy, ended waivers, and a demand that Bank Melli branches in seven countries be shuttered. The same week Iran’s Persian Gulf Strait Authority blacklisted 45 tankers -- including ships tied to ADNOC Logistics & Services, Navig8, and Saudi Bahri -- and threatened fines, confiscation, and listing of any vessel that does a ship-to-ship transfer with them.
The package left out China’s teapot refiners and the Chinese banks that finance Iran’s oil trade — Beijing buys roughly 90 percent of Iran’s exports. Bessent called the announcement a “warning shot,” declined to say “China,” and pointed to a “cure period” whose deadlines he would not disclose — restraint Politico ties to a Trump–Xi summit next month. Beijing rejected the campaign as illegal and said it would not enforce it. Asked Thursday whether he would sanction Chinese banks, Trump answered: “Who says I’m not? ... I don’t have to announce everything, do I?” (CBS News). Ali Vaez of the International Crisis Group: “The announcement itself was a nothing burger... The only thing that would make a difference at this stage is the U.S. delivering on its threats, not threatening.”
If the campaign eventually forces Tehran toward a deal, it shortens the timeline — and the pressure is visible: gas lines formed in Tehran this week, and Iran’s vice president conceded the country “cannot import” enough fuel because of the blockade (CBS News). If it corners Tehran, Mohsen Rezaei of the Supreme National Security Council has written that “not a single drop of oil will be exported” from Hormuz or the Gulf. President Pezeshkian dismissed the sanctions, said Iran “will stand firmly against economic pressures” while keeping negotiation open (CBS News), and said last weekend that Iran “cannot continue with war forever.”
Why markets say 2027 and not 2026
Broadly speaking, although both sides have reasons to settle eventually, neither faces a reason to settle now.