Strait of Hormuz closure tightens supply, raises food prices in South Asia, Africa

The Strait of Hormuz remains effectively closed amid the US-Israel conflict with Iran, and the Polymarket contract for Strait of Hormuz traffic normalization by end of April shows declining odds of resolution.

Market reaction

The WTI Crude Oil contract for hitting $160 in April sits at just 1.4% YES, even with the strait closed. Trading volume on that contract is $72,164/day in face value but only $704 in real USDC, a gap that suggests thin actual conviction. A 25-point spike occurred at 8:02 PM before quickly settling back. The traffic normalization market has no recorded volume at all, which points to traders writing off an April resolution.

Why it matters

The prolonged closure is tightening supply of fertilizer, LNG, and phosphate that moves through the strait, pushing fertilizer and food prices higher in South Asia and Africa. Countries heavily dependent on these imports face direct food security pressure the longer the blockage lasts. With YES shares for crude oil at 1.4¢, a $1 payout would mean a 71.4x return, but without signs of traffic resuming, these contracts remain deeply speculative.

What to watch

Any statements from Maersk or Iran’s Foreign Ministry could shift expectations, as could updates on US naval operations in the strait. Either category of news would likely move both the normalization and crude oil contracts.

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