Iran Deal Odds Slide as Diplomacy Stalls, Hormuz Blockade in Focus
Iran nuclear deal odds dropped to 27% for June 30, down 4¢. Regime change probabilities remain low at 1-14%. The key tradeable contracts are peace deal deadlines and Hormuz normalization. A diplomatic breakthrough would sharply impact oil markets.
Key takeaways
- 01
Iran nuclear deal odds dropped to 27% for June 30, down 4¢.
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Regime change probabilities remain low at 1-14%.
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The key tradeable contracts are peace deal deadlines and Hormuz normalization.
Full analysis
The Biden administration and Iran are engaged in diplomatic efforts, but the prediction markets are skeptical of a near-term breakthrough. Polymarket's 'US x Iran permanent peace deal by June 30' contract trades at 35¢, down 4¢ today, while the 'Strait of Hormuz traffic returns to normal by end of June' contract is at 31¢, down 3¢. The probability of a US invasion of Iran before 2027 stands at 28%, reflecting the elevated geopolitical risk. The most significant signal is on Polymarket's 'Will the Iranian regime fall by May 31?' contract, which collapsed to 1¢, suggesting traders see no imminent regime change. However, the 'Iran leadership change by June 30' contract at 14¢ indicates some possibility of internal political shifts. For traders, the key contracts to monitor are the peace deal deadlines, Hormuz normalization contracts, and the Kalshi series on Iranian nuclear deals (KXUSAIRANAGREEMENT) currently pricing a deal at 53¢ for this year. Any breakthrough in negotiations would be a major catalyst for oil prices and risk sentiment.
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