The situation in the Middle East is unpredictable, what does Polymarket think?

"The commitment of the prediction market is to use the wisdom of the crowd to make accurate and fair predictions about the most important events in society."

Written by: Pzai, Foresight News

Recently, news about the conflict between Iran and Israel has dominated the headlines. For people in war-torn areas and users under the global information network, a real-time and effective source of information holds great value. As prediction markets have gradually gained attention as a major source of information in recent years, and are expected to shine during the 2024 U.S. elections, the opinions on issues within prediction markets are also building their reference value for people. This article briefly reviews the fluctuations of opinions in the recent conflict.

Earlier on June 18, it was widely circulated on social media that "a huge surprise is going to happen - a world will remember this surprise for centuries," but no details were provided. However, Rafael Grossi, the Director General of the International Atomic Energy Agency (IAEA), stated on Wednesday that Iran's 409 kilograms (902 pounds) of highly enriched uranium may have been transferred, raising concerns in the market about the possibility of Iran using a nuclear bomb in retaliation. On Polymarket, traders are not very optimistic about the likelihood of Iran using a nuclear bomb in 2025; although it quickly surged to 20% on June 18, it rapidly fell back to 13% within the following day.

In terms of news, both Israel and the United States have plans to strike Iran's nuclear facilities to varying degrees, and senior European diplomats will hold nuclear negotiations with Iran in Geneva, which somewhat alleviates this possibility. However, the nature of the U.S. involvement in the Iran nuclear talks is rather tepid, with a 42% probability of the U.S. and Iran restarting nuclear negotiations before July; the probability of reaching a new Iran nuclear agreement before July is 16%, and the probability of reaching one this year is 49%. Meanwhile, the probability of Trump exiting the Iran nuclear talks before July also reaches 28%. Given the current conflict context and the expectations for peace talks, traders estimate that the probability of Iran ending uranium enrichment before August stands at 32%, and the probability of a ceasefire between Israel and Iran before July is roughly between 22% and 23%.

As tensions escalate, maritime agencies recommend ships avoid Iranian waters when heading to the Strait of Hormuz. On June 19, former Iranian Minister of Economy Ehsan Khandouzi stated, "Starting tomorrow, within 100 days, no tanker or liquefied natural gas vessel may pass through the strait without Iranian approval." Although not an official statement, the timing of its release and Khandouzi's high-level position may reflect broader sentiments within Iran or serve as a warning of future events. Traders predict a 21% probability that Iran will close the Strait of Hormuz before July, with a 37% chance of a closure within the year.

Trump issued a statement on June 16 calling for Iran's "unconditional surrender" and warned of possible strikes against Iranian leader Ayatollah Ali Ali Khamenei. On June 17, Iranian state media revealed that Supreme Leader Ayatollah Ali Ali Khamenei had not been seen in public for five days and had begun secretly arranging for the transfer of supreme power to the Supreme Council of Iran's Revolutionary Guard Corps, rather than his son Moitaba, as previously speculated. The move shows that in the face of an unprecedented escalation of military pressure from the United States and Israel, the 86-year-old Khamenei is prepared for the worst to ensure that the regime continues in the face of his unforeseen circumstances. But Trump has said he will not take action to get rid of Iran's supreme leader for the time being. Traders predict a 61% chance that Khamenei will leave office this year and a 23% chance that he will leave office before July.

Israeli officials estimate that the US may join the war against Iran on the evening of the 17th, but US President Trump refused to reveal on June 18 whether the US plans to join Israel's military actions against Iran, stating that Tehran has engaged in discussions with the US regarding the possibility of negotiations. In terms of troop deployment likelihood, traders have shown a higher buying interest in US military actions against Iran, with the predicted probability of action before July reaching 67%. Traders even predict a 42% likelihood of Iran being overthrown by 2025. French President Macron expressed opposition to the violent overthrow of the Iranian regime on the 17th, warning that it could lead to instability throughout the Middle East.

As one of Iran's important nuclear facilities, the Fordow enrichment facility is under strategic attention from the US and Israel, while CNN cites sources saying that Trump is increasingly inclined to strike Iran's nuclear facilities. According to Bloomberg, the US is considering launching an attack on Iran this weekend, with the Fordow nuclear facility being the main target of the attack. Traders also expect that the probability of a US strike on the Fordow nuclear facility before July has risen to 61%, and the probability of the facility being destroyed before July has reached 60%.

The recent tensions surrounding the conflict between Iran and Israel have triggered a series of chain reactions and international attention. Prediction markets and developments indicate that the core risk of the conflict is focusing on the possibility of the United States taking direct military action against Iran's key nuclear facilities, particularly Fordow, and the likelihood of a broader confrontation erupting in the short term has significantly increased. At the same time, signs of a power transfer within the Iranian regime are emerging, reflecting a high concern for the continuity of the regime under immense pressure.

Despite the concerns over the direct use of nuclear weapons being assessed by the market as a low probability in the short term, and the complete blockade of the Strait of Hormuz not being imminent, the spiral escalation of conflict and the potential threat to key energy channels have sharply increased regional security risks. Overall, the situation is developing towards a scenario of intensified direct military confrontation between the U.S. and Iran, with challenges to the stability of the Iranian regime, and the international community is on high alert for the possibility of further escalation of the conflict.