Iran blocks the Strait of Hormuz: fragile truce collapses
June 20, 2026, marks a landmark moment for global energy markets. The Khatam al-Anbiya Central Command, Iran's supreme joint headquarters, has officially announced the closure of the Strait of Hormuz to shipping. The reason cited is alleged systematic violations of the Islamabad Memorandum by the United States and Israel.
This decision fundamentally undermines recent efforts to de-escalate the conflict and once again creates enormous risks for global oil transit. Markets, which had only just begun to price in relief from geopolitical tensions, are now forced to reassess scenarios. The situation is extremely volatile, and in my view, we are on the brink of a new energy shock.
Statement from the Military Command
The Khatam al-Anbiya Central Command described the closure of the strait as a "first step" and warned of harsher measures if "aggression" continues. This statement was instantly amplified by all Iranian state media. It is worth recalling that the current round of conflict began after U.S. and Israeli strikes in late February 2026 and the imposition of earlier restrictions on passage through the strait.
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 consumption and 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. There are virtually no alternative routes for Gulf countries, making this region a critical vulnerability point for the entire global economy.
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 during the first 60 days. The plan also envisioned the lifting of the U.S. naval blockade of Iranian ports. Ship traffic began to recover after this agreement was reached, 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 direct violation of the memorandum. Previously, the memorandum 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.
It is worth noting that there is no official confirmation of the strait's closure from independent sources yet. U.S. Vice President JD Vance suggests the opposite, commenting on the long-term strategy to neutralize Iran's nuclear ambitions. However, the very fact of such a statement from Tehran is a powerful signal to the market, which is already beginning to price in a risk premium.
My analysis: Markets are underestimating the likelihood of a complete and prolonged blockade of the strait. If the conflict escalates into a hot phase, oil prices could surge above $150 per barrel, triggering a global recession. For the cryptocurrency market, this means a flight to risky assets in the short term, followed by a decline amid a liquidity crisis. Investors should prepare for extreme volatility.