US-Israel war closes Strait of Hormuz, disrupting 60,000 flights

The US-Israel war on Iran has closed the Strait of Hormuz for 30 days, and the Polymarket contract on Strait of Hormuz traffic returning to normal by May 31 sits at 25% YES, with traders pricing in extended disruption.

Market reaction

The closure has forced airlines to reroute and cancel over 60,000 flights, affecting 6 million passengers. Odds of normalization have dropped as extended airspace restrictions and closed routes show no signs of lifting. A related contract, Reza Pahlavi’s entry into Iran by June 30, is stagnant at 6% YES. Traders appear to see little connection between the aviation crisis and any political shift involving Pahlavi.

Why it matters

The Strait of Hormuz market has zero recent USDC volume, with no face value traded. That thin liquidity means a single large order could move the odds sharply. The strait itself is a chokepoint for oil tankers and commercial shipping, so the closure ripples well beyond aviation into energy and freight markets. A YES share at 25¢ offers a potential 4x return if traffic normalizes by May 31, but the current price reflects broad skepticism about a quick resolution.

What to watch

CENTCOM announcements or diplomatic initiatives signaling de-escalation would be the most direct catalysts. Airline and shipping industry lobbying for reopening could also accelerate timelines. The contract expires May 31, leaving roughly 45 days for conditions to change.

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