Oil Price Prediction Markets: Strait of Hormuz Crisis 2026

Quick Answer: What Are Oil Price Prediction Markets and How Do They Work in 2026?

Oil price prediction markets are binary event contracts on Kalshi and Polymarket asking whether WTI crude oil will hit a specific price threshold or whether the Strait of Hormuz will reopen by a given date. Polymarket hosts 20+ active oil markets with $125.9M in total trading volume as of April 30, 2026. WTI trades at approximately $108 per barrel on April 30, up from $82.60 mid-April, driven by the US-Iran Strait of Hormuz crisis. Only 5-7 ships transit the strait daily versus 135 normally. Kalshi prices 67% odds that Hormuz traffic normalizes by June 1. Hyperliquid's oil contracts saw $1 billion in single-day volume during peak Iran crisis days. DuelDuck opens all community oil and geopolitical duels at 50/50 regardless of Polymarket or Kalshi consensus pricing.

The Strait of Hormuz Crisis: What Happened and Why It Matters

The Strait of Hormuz is a 33-mile-wide waterway between Iran and the Arabian Peninsula through which approximately 20% of the world's crude oil transited before the 2026 crisis. Iran closed the strait in late February 2026 in response to US-Israeli military strikes, including the killing of Iran's Supreme Leader. The closure created the most significant oil supply disruption since the 1973 Arab oil embargo.

The Three Types of Oil Prediction Markets in 2026

Type 1: WTI Price Threshold Contracts

These contracts ask: will WTI crude oil hit a specific price (for example, $115, $120, $150) at any point during a specified month? Resolution uses Pyth oracle data - specifically, the Active Month WTI Crude Oil futures 1-minute candle 'Low' prices. If any 1-minute candle touches the threshold at any point in the month, the contract resolves YES.

The April 2026 WTI contract had $59M in trading volume on Polymarket alone. The May 2026 WTI contract has $114K in volume as of April 30, growing rapidly. The June 2026 crude oil (CL) contract has $12.65M in volume, pricing whether WTI hits key thresholds by end-June.

Key insight for price threshold contracts: the 1-minute candle resolution means a brief intraday spike to the threshold counts even if the price immediately retreats. During high-volatility sessions (EIA weekly report releases, major Iran escalation/de-escalation news), WTI can spike 3-5% in minutes. This means contracts priced at 60-70% may resolve YES on a single news-driven spike even if the average price stays below the threshold.

Type 2: Strait of Hormuz Normalization Contracts

These contracts ask: will IMF PortWatch publish a 7-day moving average of transit calls for the Strait of Hormuz equal to or above 60 by a specified date? IMF PortWatch tracks container, dry bulk, roll-on/roll-off, general cargo, and tanker ships.

The June 30 contract at 53.5% is the most interesting live market. It is genuinely binary: both the YES and NO cases are defensible. YES requires a diplomatic breakthrough or military de-escalation that produces sustained daily traffic above 60 ships. NO requires the current deadlock - 5-7 ships/day - to persist through June 30. Upcoming US-Iran talks are the primary swing factor. Participants who track State Department announcements, Iranian foreign minister statements, and daily IMF PortWatch transit data have the clearest information edge on this contract.

Type 3: Iran-Linked Geopolitical Contracts

Polymarket's Iran category hosts 252 active markets covering the full spectrum of US-Iran conflict outcomes: ceasefire contracts, prisoner exchange markets, nuclear deal negotiations, and Khamenei successor markets. These are distinct from oil price contracts but closely correlated - a ceasefire announcement moves oil prices and normalization contract odds simultaneously.

The most liquid Iran-adjacent contracts in April 2026: US-Iran permanent peace deal by May 30 (30% YES, down 8 points on stalled talks per OddsShark April 27 data). Iranian foreign minister meeting contracts. US strikes Iran continuation contracts.

How Oil Prediction Markets Resolve: What Traders Must Know

WTI Price Contracts: Pyth Oracle

WTI price threshold contracts on Polymarket resolve using Pyth Network oracle data - specifically 1-minute candle Low prices for Active Month WTI Crude Oil futures. If the CME publishes an official settlement price, that may be used as a backup. The resolution source is the CME Group daily settlement price as published for the Active Month (CL) futures contract.

Critical detail: only days on which CME publishes an official settlement price are included. Weekends, holidays, and market closures are ignored. This means a gap-up opening on Monday after a weekend development does not count for Saturday or Sunday resolution - only the Monday CME settlement.

Hormuz Normalization Contracts: IMF PortWatch

Strait of Hormuz normalization contracts resolve using IMF PortWatch data - specifically the 7-day moving average of transit calls published at portwatch.imf.org. The threshold is 60 ships per day (7-day moving average). Pre-crisis normal was approximately 135 ships/day.

The 60-ship threshold is approximately 44% of pre-crisis normal. This is a deliberately low bar - not 'return to full normal' but 'return to significant activity.' A ceasefire that produces partial normalization could resolve these contracts YES even if full shipping restoration takes months.

Where the Information Edge Lives in Oil Prediction Markets

Signal 1: EIA Weekly Petroleum Status Reports

The US Energy Information Administration publishes weekly petroleum status reports every Wednesday at 10:30 AM ET. These reports include total commercial inventory changes, which directly move WTI prices. The April 24 EIA report showed a 17-million-barrel draw in total commercial inventories - significantly tighter than expected, supporting the bullish oil price consensus. Participants who model EIA inventory outcomes from rig count data, import tracking, and refinery utilization have a systematic edge on WTI price threshold contracts during the 24-hour window before and after each Wednesday report.

Signal 2: IMF PortWatch Daily Transit Data

IMF PortWatch publishes daily transit call data for the Strait of Hormuz. During normal conditions, this data is updated once daily and shows consistent numbers. During crisis conditions, it shows the dramatic collapse in traffic (5-7 ships/day versus 135 pre-crisis). Participants who monitor PortWatch daily - comparing actual transit calls to the 60-ship resolution threshold - can track normalization progress in real time before markets fully price it.

The April 26 data showed 19 vessels crossed on that day - a brief spike following the April 8 accord. This spike was visible in PortWatch before it moved Hormuz normalization contract prices on Polymarket and Kalshi. Participants tracking PortWatch directly had a several-hour window before the general market repriced.

Signal 3: US-Iran Diplomatic Signals

Oil prediction markets reprice most dramatically on US-Iran diplomatic developments: State Department briefings, Trump Truth Social posts about the Iran conflict, Iranian foreign minister press conferences, and UN mediation announcements. These signals appear in public channels (State Department website, official Iranian state media IRNA, Trump's Truth Social) before they are fully processed by the general prediction market participant.

Participants who set up alerts for: @StateDept announcements, @RealDonaldTrump posts mentioning Iran, and IRNA English-language publications are positioned to react to diplomatic developments 15-60 minutes before the general Polymarket/Kalshi participant base reprices these contracts.

Signal 4: War Risk Insurance Premium Tracking

War risk insurance premiums for Persian Gulf shipping are published by Lloyd's of London and the Joint War Committee. When premiums spike, it signals insurance market participants (who have superior geopolitical intelligence access) are pricing increased conflict risk. When premiums decline, it signals de-escalation is being priced by informed actors. These premium movements are a leading indicator for Hormuz normalization contract prices.

Signal 5: OPEC+ Production Decisions

OPEC+ signaled a modest 206,000 barrel per day production hike starting May 2026, amid the UAE's exit from OPEC+ effective May 1. OPEC+ production decisions offset some of the Hormuz supply shock - a OPEC+ production increase announcement can reduce the probability of WTI reaching very high thresholds even if the Hormuz closure continues. Monitor OPEC+ ministerial meeting dates and Saudi Aramco official statements as secondary oil price signals that interact with the Hormuz crisis narrative.

The Live Market Snapshot: April 30, 2026

The DuelDuck Opportunity: Oil and Geopolitical Community Duels

Oil and energy markets have a concentrated participant base on Kalshi and Polymarket: commodity traders, energy industry professionals, and macro-focused crypto traders. DuelDuck community duels for this audience distribute to participants who follow OPEC+ announcements, EIA data, and Hormuz shipping data as part of their professional or investment routine. These participants have genuine informed conviction - exactly the community that fills DuelDuck pools efficiently.

Risks Specific to Oil Prediction Markets

• Geopolitical binary risk. Oil prediction markets are among the most event-driven contracts in prediction markets. A single Trump tweet, an Iranian announcement, or a US military action can move WTI $10-15 in hours and reprice all connected contracts. The speed of geopolitical repricing exceeds the reaction time of most retail participants.

• Resolution source disruption risk. WTI price contracts resolve on Pyth oracle data, which requires live CME futures prices. If CME markets close early (holidays) or experience technical disruptions, the Polymarket backup resolution (CME daily settlement price) applies. This substitution is described in the contract but may produce different resolution outcomes than participants expect.

• Normalization definition risk. The Hormuz normalization contracts require a 7-day moving average above 60 - not a single day above 60. A one-day spike following a ceasefire announcement will not resolve YES if the following days revert to 5-7 ships. Participants must track the 7-day moving average, not individual daily counts.

• Iran insider trading risk. The Maduro Polymarket case (US Army soldier charged with 5 felonies for using classified intelligence) established that US government officials with access to classified military plans have traded on related Polymarket contracts. Oil contracts tied to Iran military action carry the same risk of informed trading by actors with non-public intelligence.

Conclusion: The Most Actively Repricing Category in Prediction Markets

Oil prediction markets in 2026 are the fastest-repricing category in the entire prediction market ecosystem. The Strait of Hormuz crisis moved WTI from $65 to $112 in weeks, drove $33M in Polymarket trading on a single Hormuz normalization contract, and created a $1 billion single-day volume day on Hyperliquid's Iran-linked oil contracts.

The live question as of April 30 is not whether oil is expensive - WTI at $108 makes that clear. The live question is whether the Hormuz deadlock breaks before June 30 (53.5% YES on Polymarket) or extends through summer (the Kalshi June 1 market at 67% YES suggests more optimism on a slightly longer timeline).

Participants who track IMF PortWatch daily transit data, EIA Wednesday inventory reports, US-Iran diplomatic signals, and war risk insurance premiums have a genuine information edge over general prediction market participants who anchor to yesterday's oil price and news headlines. The information edge in oil markets is not about being smarter - it is about monitoring the right data sources 24-48 hours before they are processed by the general market.

The Hormuz crisis made oil prediction markets mainstream. The resolution of the crisis - whenever it comes - will be one of the most traded events in prediction market history.

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Disclaimer: This article is for informational purposes only and does not constitute financial advice. Prediction market trading involves risk of loss. Oil and geopolitical markets are especially volatile. Verify the legal status of prediction market trading in your jurisdiction before participating.