Iran’s IRGC and Foreign Ministry clash over Strait of Hormuz blockade

Iran’s IRGC and Foreign Ministry are clashing over the Strait of Hormuz. The chance of Trump announcing the blockade lift by May 31 is at 73.5% YES, down from 90% yesterday.

Ghalibaf’s posts suggest a divide within Iran, with the IRGC taking a tough stance. This has led to a drop in the odds of Trump lifting the blockade soon. The April 19 market, with just one day left, is at 8% YES, down from 28% yesterday. The term structure shows a 70-point increase between April 19 and May 31, indicating traders expect any resolution to occur closer to the May deadline.

For the UK warship market, the odds of a British naval presence in Hormuz by April 30 are at 8.5% YES, down from 12% yesterday. The IRGC’s actions and Iran’s internal policy split have reduced expectations of foreign warships passing through the strait soon.

Trading volumes show $29,602 in USDC traded across markets related to the blockade announcement. The depth is limited, with $1,419 needed to move the May 31 market 5 points, suggesting potential volatility if a large trade occurs. The largest movement was a 5-point drop in the May 31 market, showing traders’ skepticism about a near-term resolution.

The internal conflict in Iran’s leadership suggests ongoing tensions. The source tier is low, but the implications are clear: Iran’s mixed signals complicate US decision-making. Buying YES at 73.5¢ could yield a 1.28x return if resolved, but traders need confidence in a diplomatic breakthrough.

Watch for any decisive moves from the IRGC or statements by Iranian Foreign Minister Abbas Araghchi. A shift in Iran’s aggressive posture or US acknowledgment of Iranian compliance could significantly change market dynamics.

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