Iran blocks the Strait of Hormuz: fragile truce collapses, oil markets in shock
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 instantly threw markets back into the realities of geopolitical instability that many analysts had been quick to dismiss as a thing of the past.
Approximately 21 million barrels of oil and petroleum products pass through the Strait of Hormuz every day — that's about 20% of global consumption and a quarter of all maritime trade in "black gold." In addition, significant volumes of liquefied natural gas from Qatar and the UAE transit through the strait. Any disruption in this narrow bottleneck of global energy is immediately reflected in prices, as alternative routes for Gulf countries are virtually non-existent.
The Islamabad Memorandum: Peace Was So Close
Just three days ago, around June 17, the 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 return, the United States was to lift the naval blockade of Iranian ports. After this agreement was reached, vessel traffic indeed began to recover, leading to a drop in energy prices — markets breathed a sigh of relief.
However, the new statement from the Iranian command effectively nullifies these agreements. Tehran views Israel's ongoing actions in Lebanon and alleged violations by Washington as a gross non-compliance with the memorandum. Iran warned that the closure of the strait is only a "first step" and promised further measures if "aggression continues."
The paradox of the situation is that U.S. officials, particularly Vice President JD Vance, point to the opposite and continue to assert their commitment to a diplomatic resolution. This creates an information chaos that only amplifies volatility.
My comment: Markets have once again become hostages to a geopolitical game where words diverge from actions. Investors should prepare for a sharp rise in oil prices and a strengthening correlation between traditional assets and cryptocurrencies, which often act as a hedging tool in such moments. The closure of Hormuz is not just a local conflict but a direct blow to global supply chains, the consequences of which we will feel for weeks.