President Trump has instructed aides to prepare for an extended blockade of Iran, aiming to force nuclear concessions. Odds on the Hormuz blockade lifting by May 31 have dropped to 43.5% YES, down from 60% just 24 hours ago.
Market reaction
The Hormuz blockade market is trading at $134,629 in daily USDC volume, with $17,388 needed to move the price 5 points — moderate liquidity where significant capital can shift short-term prices. The largest recent move was a 5-point drop at 1:33 AM as traders priced in the blockade extension news. The Iran leadership change by December 31 market is now more directly in play, with analysis projecting a 15% increase in odds based on the extended pressure campaign.
Why it matters
The shift from a temporary blockade to an extended one changes the calculus on both markets. Choking Iran’s oil exports over a longer timeline compounds financial strain on the regime, raising the probability of internal leadership challenges. At the same time, an extended blockade makes a quick resolution by May 31 far less plausible, which explains the 16.5-percentage-point drop in YES odds on the Hormuz market within a single day.
What to watch
CENTCOM operational updates and any public statements from Trump or Iranian officials on negotiations will directly affect both markets. Any sign of resumed diplomacy could reverse the Hormuz market’s slide, while continued escalation would likely push Iran leadership change odds higher. At current prices, a YES share at 44¢ in the Hormuz blockade market pays $1 if the blockade lifts by May 31, but recent developments make that a high-risk position.
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