Bettors on the prediction markets platform Kalshi are increasingly pessimistic about the reopening of the Strait of Hormuz, with odds of normal traffic returning by June 1 dropping below 50%. This comes after a U.S.-Iran ceasefire extension, yet no new agreements were made regarding the strait’s blockade. Oil prices reacted sharply, with Brent crude surpassing $100 per barrel as geopolitical tensions continue to escalate, particularly following President Trump’s threats against vessels laying mines in the area.
The implications for the energy sector are significant. UBS’s chief investment officer highlighted that the ongoing blockade and Iran’s recent actions—such as seizing unauthorized ships—indicate that a resolution remains distant. The current low transit levels, which have fallen from over 100 ships daily to just eight, suggest that sustained high energy prices could hinder economic growth.
For market professionals, the key takeaway is the heightened uncertainty surrounding energy supply routes, which could lead to prolonged elevated oil prices and increased recession risks, with Kalshi bettors now assigning a 26% chance of a U.S. recession by 2026.
Source: cnbc.com