Iran’s Vice President Mohammad Reza Aref warned there would be no “free security” in the Strait of Hormuz if Iranian oil exports face restrictions. The likelihood of the UK sending warships through the strait by April 30 sits at 8.5% YES, down from 12% yesterday.
The drop in odds followed Aref’s comments, which reasserted Iran’s ability to threaten shipping through the chokepoint. The UK warship market moved lower despite the rhetoric, suggesting traders read the statement as reducing rather than increasing the chance of a UK naval response. The market’s largest recent move was a 2-point spike at 4:25 PM, which points to traders reacting to signals of increased naval activity.
Daily USDC trading volume in this market is $1,412, with a $304 move required to shift prices by 5 points. That’s a thin order book, and a single moderately sized trade could move the price significantly.
Aref’s warning may look like routine posturing, but it comes during active negotiations over Iranian oil exports and ongoing tensions in the strait. For traders, buying YES at 8.5¢ offers a 11.8x return if the UK sends warships by month’s end. With the order book this thin, even a single credible report of UK naval deployment could push the price sharply higher.
Watch for announcements from the UK Ministry of Defence or IRGC movements in the strait. Either could move this market fast given the low liquidity.
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