Iran blocks the Strait of Hormuz: fragile ceasefire collapses
June 20, 2026. The Khatam al-Anbiya Central Command — Iran's highest joint headquarters — has officially announced the closure of the Strait of Hormuz to shipping. The reason cited is violations of the Islamabad Memorandum by the United States and Israel.
This decision fundamentally changes the geopolitical landscape and nullifies recent de-escalation efforts. Markets that had already priced in easing tensions now face a new reality — risks to global oil transit are returning with doubled force.
Military Command Statement: The First Step Toward Escalation
The Khatam al-Anbiya Central Command described the blockade of the strait as a "first step" and warned of further measures if aggression continues. This statement was instantly disseminated by all key Iranian state media. The conflict, which began after U.S. and Israeli strikes in late February 2026, has entered a new, more dangerous phase. Previously imposed restrictions on vessel passage through the strait have now transformed into a full blockade.
It is worth recalling that approximately 21 million barrels of oil and petroleum products are transported through the Strait of Hormuz daily. According to the U.S. Energy Information Administration, this accounts for about 20% of global liquid hydrocarbon consumption and roughly a quarter of all seaborne oil trade. In addition to oil, major export shipments of liquefied natural gas from Qatar and the UAE pass through the strait. Alternative routes for Gulf countries are virtually nonexistent, making this region a critical point of vulnerability for the entire global economy.
Disagreements Over the Islamabad Memorandum: A Fragile Compromise Shattered
The 14-point Islamabad Memorandum, agreed upon around June 17, 2026, stipulated that Iran would make maximum efforts to ensure the safe and free passage of commercial vessels during the first 60 days. The document also envisioned the lifting of the U.S. naval blockade of Iranian ports. Vessel traffic began to recover, contributing to a decline in energy prices.
However, the new statement from the Iranian military effectively nullifies these agreements. Tehran views Israel's ongoing actions in Lebanon as a direct violation of the memorandum. Although the agreement quickly led to lower oil prices, the current situation once again focuses market attention on the threat of a long-term supply shock.
Notably, there is still no official confirmation of the strait's blockade — U.S. Vice President JD Vance suggests otherwise, stating a long-term strategy to neutralize Iran's nuclear ambitions. Yet the very fact of such a statement from Iran's highest military command is a powerful signal to the market that cannot be ignored.
My expert assessment: Markets are underestimating the likelihood of a full and prolonged blockade of the Strait of Hormuz. Even if this is a temporary pressure measure, volatility in energy markets and, consequently, in crypto asset markets will spike sharply. Investors should prepare for a scenario where Brent crude oil may test levels above $100 per barrel, putting pressure on risky assets, including Bitcoin, in the short term. However, in the long term, such geopolitical shocks often fuel interest in decentralized assets as a haven from traditional risks.