Crashing Expectations (For Hormuz Reopening By 9/1): 6%

Menzie Chinn
By Menzie Chinn of Econbrowser
Professor of Public Affairs and Economics at the University of Wisconsin •

Kalshi estimates for the Strait of Hormuz reopening by September 1 have plunged to just 6%. Brent crude and NYMEX prices remain surprisingly disconnected from this supply risk, creating a mystery for global energy markets.

depositphotos_67526579-stock-photo-silhouette-of-oil-pumps.jpg
Source: DepositPhotos

Latest Kalshi estimates on re-opening by September 1:

Figure 1: Oil price, Brent $/bbl (black, left scale), cash NYMEX for 7/17 (gray +), and Kalshi prediction of Sept 1 re-opening of Strait of Hormuz (blue, right scale). Source: EIA, NYMEX via barchart, Kalshi.

One would think the two series would have moved inversely, but until the 6th or so, they have not. That is something of a mystery.

The cash reading was for the 7/16 closing (NYMEX) at $88.

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