Tehran vows retaliation after US seizes Iran-flagged tanker in Hormuz

Tehran has vowed retaliation following the US Navy’s seizure of an Iran-flagged tanker in the Strait of Hormuz. The odds of the US lifting its blockade by May 31 now sit at 78% YES, down from 90% just 24 hours ago.

Market reaction

The May 31 contract dropped 12 points as traders priced in the seizure. The April 19 market moved even more dramatically, with odds falling to 8% YES from 41% yesterday. The 70-point spread between April 19 and May 31 tells a clear story: traders see no near-term resolution but still assign decent probability to one within about six weeks.

The May 31 market had $9,914 in daily USDC volume. Order book depth sits at $1,419 to move the price 5 points, meaning the market is liquid enough to function but still susceptible to large single trades. The biggest move today was a 5-point drop, likely triggered directly by the tanker news.

Why it matters

The Navy’s seizure makes lifting the blockade harder in the short term. Tehran’s retaliation threats and reported drone strikes raise the probability of further military confrontation. A YES share at 78¢ is a bet on a diplomatic breakthrough within 43 days. With Iran unlikely to back down quietly, that price carries real downside risk.

What to watch

Formal statements from CENTCOM or the Pentagon will matter most. Confirmed Iranian retaliation or additional US military operations could push odds lower still. Trump’s public comments, particularly on Truth Social, are the other key signal for where these contracts move next.

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