**Persistent geopolitical stalemate and hardened Iranian demands have kept Strait of Hormuz traffic far below normal levels into mid-August 2026, supporting the 85.5% market-implied probability that flows will not normalize by September 30.**
Since the February 28, 2026 closure amid the U.S.-Iran conflict, daily transits have remained at roughly 10 vessels versus a pre-crisis baseline of 88–140, with convoys under escort and repeated attacks on non-compliant shipping. Recent developments through early August show stalled diplomacy: Iran’s Supreme National Security Council reiterated that the strait will not reopen until the U.S. “corrects its behavior,” listing conditions including sanctions relief, compensation for damages, and changes to shipping lanes. An interim Oman-brokered framework has not produced a binding agreement, and both sides have added or reiterated demands in recent days.
These dynamics sustain elevated Brent crude prices (recently near $84) and elevated tanker and insurance costs, reflecting trader expectations of continued supply constraints affecting ~20% of global oil flows. With resolution tied to complex political concessions unlikely to materialize within the next seven weeks, market pricing embeds a high probability of ongoing disruption through September 30. Key near-term catalysts include any breakthrough in U.S.-Iran-Oman talks or renewed attacks that could further delay normalization.