Iran closes Strait of Hormuz, impacting global oil supply amid tensions

Iran has closed the Strait of Hormuz, the narrow chokepoint that carries roughly one-fifth of global oil supply, and the immediate result is visible on trading screens: NYMEX WTI June futures settled at $95.42, up 61 cents on the day.

The International Energy Agency confirms supply disruptions from the closure, which coincides with ongoing US-Israel military actions against Iran and a sharp drop in Russian export capacity caused by damaged infrastructure. Those layered constraints should, in theory, signal serious upside risk for crude prices.

Yet the prediction markets tell a different story. The contract for WTI reaching $150 in May now trades at a 3.5 percent YES probability, down from 6 percent a week ago. The odds of crude hitting elevated targets for the week of May 4 have collapsed from 48 percent to 0.7 percent. Traders are pricing in geopolitical noise, not sustained physical shortage.

Market participants appear to interpret the Hormuz shutdown and reduced Russian exports as supportive of higher prices, but only up to a point. The rapid repricing of tail-risk contracts suggests skepticism that Iran can keep the strait closed long enough, or that OPEC+ and the US will sit on their hands.

What matters next is whether Tehran maintains control over the strait or whether US-Iran negotiations produce a quick off-ramp. Announcements from OPEC+ on production or from the US Treasury on strategic reserves could blunt any further rally within days.

The contradiction is stark: a genuine supply shock is underway, yet the speculative crowd has already marked down the probability of the kind of price surge that historically follows such closures.

Original reporting: Crypto Briefing.