US forces fire on Iranian merchant ship, IRGC intervenes in Strait of Hormuz

Iran’s Mehr news reports US forces fired on an Iranian merchant ship, prompting IRGC naval intervention. Strait of Hormuz traffic normalization by May 31 sits at 0% YES.

The incident reinforces the blockade’s hold on Strait of Hormuz Traffic markets. With 43 days until May 31, odds of traffic returning to normal are at zero. Traders are pricing in increased enforcement and direct confrontations between US and Iranian forces.

The June 30 market is also at 0% YES for normalization. This naval skirmish pushes the probability of a peaceful resolution further out. Traders appear to expect any potential catalyst no earlier than late May to early June.

The Kharg Island control market is largely unchanged so far. The Kharg Island by June 30 market sits at 19.5% YES. A significant spike in these odds could follow if the naval blockade intensifies.

Volume on the Strait of Hormuz markets is nonexistent right now, which suggests either skepticism about the Mehr news sourcing or traders waiting for more definitive actions before committing capital.

With the IRGC’s intervention, the next US response is the key variable. If the blockade tightens or another naval clash occurs, expect further movement in these markets. New sanctions or military maneuvers would provide clearer signals for where odds shift next.

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