Iran asserts control over Strait of Hormuz, tensions with US escalate
Iran has asserted firm control over the Strait of Hormuz, calling it a 'natural right' akin to its pursuit of nuclear capability, escalating tensions with the US amid stalled diplomatic talks. The strategic waterway's closure has disrupted 20% of global oil shipments, and Iran conditions reopening it on the US lifting its blockade. Markets reflect dimming hopes for near-term diplomacy or resolution, with decreasing odds of a US policy shift by May 31.
- ▪Iran's Deputy Speaker likened control of the Strait of Hormuz to the country's atomic bomb program.
- ▪The Strait of Hormuz is critical for 20% of global oil transit and remains under Iranian control.
- ▪Diplomatic meetings between the US and Iran are unlikely soon, and the US blockade remains in place.
- ▪Market probability for the US lifting the blockade by May 31 is 41.5%, down from 44%.
- ▪Iran is linking reopening the strait to the US lifting sanctions, while delaying nuclear talks.
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## Market Snapshot The market for the next US-Iran diplomatic meeting on April 22 is currently unresolved, with no active YES pricing. The market for Trump’s announcement of lifting the Hormuz blockade by May 31 is priced at 41.5% YES, down from 44% a day ago. The Strait of Hormuz traffic market remains unresolved, with no active pricing. ## Key Takeaways – The statement by Iran’s Deputy Speaker appears to reduce the likelihood of imminent US-Iran diplomatic meetings. – Iran’s firm stance on the Strait of Hormuz suggests a decreased probability of the US lifting its blockade by May 31. – Continued control over the Strait of Hormuz by Iran may indicate a lower chance of traffic normalizing by the end of April.
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