The US has imposed sanctions on an Iranian oil shipping network tied to Mohammad Hossein Shamkhani, son of the late Ali Shamkhani, as part of the Trump administration’s “maximum pressure” campaign. The market for Trump agreeing to Iranian oil sanction relief in April now sits at 36.5% YES, and odds on Strait of Hormuz traffic normalizing by end of May are expected to decrease by 15%.
Traders are re-evaluating the Strait of Hormuz traffic market’s chances of returning to normal levels by May 31. Increased enforcement reads as bearish for normalization. The sanction relief market has moved lower in response, with traders pricing in continued US pressure on Iran.
The Strait of Hormuz traffic market reacts sharply to any signals of tension or relaxation between the US and Iran. With 46 days left until the end of May, traders are pricing in a lower likelihood of normal traffic levels resuming. The sanction relief market has actual USDC volume at $2,735/day and a $422 requirement to move prices by 5 points.
These sanctions signal that the US is not softening its economic pressure on Iran in the near term. A YES share for Trump agreeing to sanction relief is priced at 37¢, paying $1 if resolved, for a 2.7x return. Betting YES requires believing in a significant policy reversal within April, which these new sanctions make harder to justify.
Watch for statements from CENTCOM or the IRGC that could shift shipping traffic expectations. Any movement in US-Iran negotiations or changes in Trump’s stance on sanctions would directly affect both markets.
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