Polymarket Traders Double The Odds of $80 Oil After Middle East Escalation

Just one week after prediction markets assigned only a roughly 20% chance that West Texas Intermediate (WTI) crude would climb above $80 per barrel this month, traders have dramatically changed their outlook.

The Polymarket contract asking whether WTI will trade above $80 this month has surged to around 56%, more than doubling from last week's levels as tensions between the United States and Iran intensified.

The move follows a sharp rally in energy markets after President Donald Trump declared that the tentative ceasefire with Iran was effectively over, saying, "To me, I think it's over."

His comments came after attacks on commercial shipping in the Strait of Hormuz and subsequent U.S. strikes on more than 80 Iranian targets. Iran later said it was targeting U.S. military sites in Bahrain and Kuwait, renewing fears that the conflict could disrupt one of the world's most important oil shipping routes.

The market reacted immediately. Brent crude climbed more than 6% to $78.63 per barrel, while WTI rose 6.2% to $74.85. Natural gas prices also advanced as traders priced in the growing geopolitical risk.

Prediction markets have moved just as quickly. Alongside the jump in the probability of $80 oil, only 22% of traders now expect WTI to fall below $65 this month. The shift is a sharp reversal from last week, when markets were largely betting that oil prices would remain contained despite the conflict.

UBS analyst Dominic Ellis said investors may have become too optimistic about de-escalation. "Markets were too quick to buy into the de-escalation narrative," Ellis wrote, noting that renewed attacks around the Strait of Hormuz could keep oil trading in a higher range over the near term.

While Ellis believes the probability of oil spiking above $100 per barrel remains low, prediction markets are increasingly pricing in a sustained risk premium as uncertainty in the Middle East grows.