Iran blocks the Strait of Hormuz: fragile ceasefire collapses
On June 20, 2026, the Khatam al-Anbiya Central Command announced the closure of the Strait of Hormuz to shipping. The official reason is a violation of the Islamabad Memorandum by the United States and Israel.
This decision directly undermines recent de-escalation efforts and once again creates colossal risks for global oil transit. Markets that had just begun to price in easing tensions are now forced to reassess their forecasts.
Statement from the Military Command
Iran's Supreme Joint Staff called the closure of the strait a "first step" and warned of further measures if "aggression" continues. The conflict, it should be noted, escalated after U.S. and Israeli strikes in late February 2026, which led to the introduction of earlier restrictions on vessel passage.
Approximately 21 million barrels of oil and petroleum products are transported through the Strait of Hormuz daily — this accounts for about 20% of global liquid hydrocarbon consumption and a quarter of all seaborne oil trade. According to the U.S. Energy Information Administration, this is a key chokepoint. In addition to oil, major export shipments of liquefied natural gas from Qatar and the UAE pass through the strait. Any disruptions here invariably increase price volatility, as alternative routes for Persian Gulf countries are virtually nonexistent.
Disagreements over the Islamabad Memorandum
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 for the first 60 days. The plan also called for the U.S. to lift the naval blockade of Iranian ports. Vessel traffic began to recover, helping to lower energy prices.
The new statement from the Iranian army effectively nullifies these agreements. Tehran views Israel's ongoing actions in Lebanon as a violation of the memorandum. Previously, this agreement quickly led to a drop in oil prices, but the current situation once again draws attention to supply issues amid a potential prolonged supply shock.
However, there is no official confirmation of the strait's closure yet. U.S. Vice President JD Vance indicates the opposite, stating a long-term strategy to neutralize Iran's nuclear ambitions.
My analysis: The market will likely react with a sharp spike in oil prices and increased volatility in the coming hours. If the closure is confirmed, we could see a short-term increase in the cost per barrel of 15-20%. Investors should closely monitor Washington's response — any military presence in the region will only exacerbate the crisis.