Phil: Will the Strait of Hormuz reopen to all LNG traffic before 31st May 2026?

This is its condensed report. Full version here.

Perplexity response:

Research Context: Strait of Hormuz LNG Traffic Reopening Before May 31, 2026

Step-by-Step Analysis of Information Needed:

Current LNG traffic levels as of mid-May 2026
Definition calibration – what constitutes “all international maritime LNG traffic” vs current “halted or severely restricted” status
Timeline context – we have only 17 days for resolution
Geopolitical developments – status of ceasefire and negotiations
Expert assessments – shipping industry views on reopening prospects
Market signals – prediction market implied probabilities
Pre-conflict baseline – normal LNG traffic volumes for comparison

10 Key Citations:

[1] Polymarket – Strait of Hormuz Traffic Returns to Normal by July 31 (May 11-14, 2026)

Description: Prediction market with resolution criteria tied to IMF Portwatch 7-day moving average of transit calls reaching 60+
Key Data: Market prices show 54.5% implied probability AGAINST normalization by July 31; $72.8K total trading volume
Summary: The market reflects a closely contested balance with Iranian restrictions in place since late February 2026. Commercial flows have dropped to roughly 5% of pre-conflict averages. The resolution mechanism requires 60 transit calls (7-day average) to confirm “normal” operations, suggesting current levels are substantially below this threshold.

[2] Cyprus Mail – “Strait of Hormuz remains open in name, constrained in practice” (May 12, 2026)

Description: Shipping analysis of April 2026 transit data from AXSMarine
Key Data: LNG movements “particularly limited” with only 2 crossings in entire April; approximately 900 commercial vessels west of Hormuz by month-end; pre-conflict normal rates: 15-20 million barrels/day
Summary: Despite a ceasefire in April, the Strait remained operationally fragmented with gas carriers showing “no indication of a broad-based recovery.” Vessel movements are driven by security conditions rather than normal commercial patterns. LNG traffic specifically remains among the most constrained segments, contradicting any narrative of full reopening.

[3] Wood Mackenzie – Energy Trade Flows Rerouted; Strait Remains Mostly Closed (Recent, May 2026)

Description: Energy sector analysis of current disruptions and diplomatic status
Key Data: Post-ceasefire maximum transit: ~25 ships/day; current transit rate: ~10 ships/day; peacetime normal: 150-170 vessels/day
Summary: Even after ceasefire agreement, transits dropped back to only 10/day (roughly 6-7% of normal). Iranian demands include end to hostilities, sanctions lifting, nuclear deal, and Strait reopening – conditions not yet met. The possibility of continued conflict and renewed attacks raises prospect of prolonged closure.

[4] Crypto Briefing – Iran Expands Control Over Strait of Hormuz (May 2026)

Description: Prediction market data compilation on Strait reopening probabilities
Key Data: May 15 probability: 0.5% YES for traffic return to normal; May 31 probability: 9.5% YES
Summary: Market-implied probabilities show very low confidence in reopening by May 31 (only 9.5% probability). The extremely low May 15 probability (0.5%) suggests markets assign minimal probability to imminent resolution within the next 24 hours.

[5] Mezhа – Iran Tightens Control Over Strait; US Warns of Disruption (May 2026)

Description: Geopolitical analysis of strategic standoff
Key Data: Strategic standoff between Iran and US continues; major oil routes disrupted
Summary: The confrontation remains unresolved with Iran maintaining control restrictions. Alternative pipelines are being developed as market participants prepare for prolonged disruption, suggesting no near-term full reopening is anticipated.

Critical Assessment for May 31 Resolution:

Current Status (as of May 14, 2026):

LNG traffic: Severely restricted with only 2 crossings recorded in entire April
Overall traffic: ~10 ships/day (versus 150-170 normal) = ~6-7% of baseline
Geopolitical conditions: Ceasefire in place since April, but underlying demands unmet

Gap to Resolution:
The resolution criteria requires “reopened to all international maritime LNG traffic” with traffic “no longer halted or severely restricted.” Current data shows:

Only 2 LNG transits in 30 days (April) = 0.067 per day
Pre-conflict normal would involve dozens of LNG carriers monthly
Gas carriers specifically show “no indication of broad-based recovery”

Combining these factors, the path to a “Yes” resolution is exceptionally narrow. It would require a sudden, comprehensive political agreement that is immediately implemented and trusted by the global shipping industry. Given the evidence, this scenario is highly improbable within the specified timeframe. A forecast in the high single digits correctly balances the overwhelming evidence for ‘No’ with the small, non-zero chance of a rapid, unexpected geopolitical development.

Probability Calculation:

Base case (no major changes): ~92-95% probability of NO resolution
Diplomatic breakthrough scenario: ~3-5% probability
Iranian unilateral reversal: ~1-2% probability
Other unforeseen events: ~1-2% probability

The prediction market signal of 9.5% seems slightly high given:

The requirement for “all international maritime LNG traffic” is stringent
Current LNG traffic is essentially zero
Very limited time window

However, accounting for:

My historical overconfidence
Geopolitical uncertainty
Black swan possibilities

The market estimate provides a reasonable anchor. Given the extremely restricted current state, the high bar for resolution, and only 17 days remaining, I estimate the probability is slightly lower than the market consensus but within the same range.

Probability: 8%

=== Forecast Result ===

Reasoning and Analysis

Current Situation Assessment

Based on the research, as of May 14, 2026:

The Strait of Hormuz has been effectively closed to commercial LNG traffic since late February/early March 2026 following the start of the Iran war
Overall vessel traffic is at ~10 ships/day (versus normal 120-170 vessels/day) – only about 6-7% of normal
LNG specifically: Only 2 crossings recorded in all of April 2026, and one limited Qatari LNG shipment on May 10 via a restricted northern route
This single May 10 transit was through an Iranian-approved special route, not normal open operations

Resolution Criteria Analysis

The question requires:

Major news outlets reporting the strait has “reopened to all international maritime LNG traffic”
Traffic “no longer halted or severely restricted”

This is a high bar – not just occasional restricted transits, but full open access for all LNG traffic.

Key Evidence Against YES Resolution:

Industry forecasts: Baker Hughes (April 24) explicitly expects no full reopening until H2 2026
Traffic data: Near-zero LNG operations currently (essentially halted)
Failed reopening attempts: Brief April 21-22 reopening collapsed within 24 hours
Geopolitical deadlock: Iranian demands (sanctions lifting, nuclear deal) are complex and unresolved
Prediction markets: 9.5% probability for May 31 normalization