Iran announced the closure of the Strait of Hormuz: the ceasefire has collapsed, markets in alarm
On June 20, 2026, the Khatam al-Anbiya Central Command—Iran's highest joint headquarters—officially announced the closure of the Strait of Hormuz to shipping. The reason cited was violations of the Islamabad Memorandum by the United States and Israel. This decision not only nullifies recent diplomatic efforts toward de-escalation but also once again jeopardizes global energy supply chains.
The closure of the strait is Tehran's direct and harsh response to what it perceives as ongoing military actions by Washington and Tel Aviv, which began in late February 2026. The Iranian command calls this step the "first phase" and warns of more serious measures if the "aggression" continues. The situation is developing rapidly: just a few days ago, markets optimistically received news of the memorandum, and now we are witnessing a complete reversal.
Energy artery under threat
The importance of the Strait of Hormuz to the global economy cannot be overstated. According to the U.S. Energy Information Administration, approximately 21 million barrels of oil and petroleum products pass through this narrow corridor daily—roughly 20% of global consumption and a quarter of all seaborne oil trade. Additionally, major export shipments of liquefied natural gas from Qatar and the UAE transit through the strait. There are virtually no alternative routes for Gulf countries, so any disruption in the strait's operation instantly triggers price volatility.
Islamabad Memorandum: hope was short-lived
Just three days ago, on June 17, a 14-point Islamabad Memorandum was agreed upon. The document stipulated that Iran would make maximum efforts to ensure the safe and free passage of commercial vessels during the first 60 days. In response, the U.S. was to lift the naval blockade of Iranian ports. Ship traffic began to recover, leading to a short-term decline in oil prices.
However, the current statement from the Iranian military completely nullifies these agreements. Tehran views Israel's ongoing actions in Lebanon as a direct violation of the memorandum. Markets, which had already priced in reduced tensions, are now forced to revise their forecasts sharply upward in terms of risk.
My analysis: The closure of the Strait of Hormuz is not just a tactical move but a signal of a deep crisis of trust. Even if U.S. officials, such as Vice President JD Vance, deny the fact of the closure, the very fact of such a statement from Iran already exerts strong pressure on oil futures and cryptocurrencies, which often correlate with traditional risk assets. Investors should prepare for a period of high uncertainty and a potential rally in energy prices.