Iran blocks the Strait of Hormuz: fragile truce collapses, oil markets on the brink of 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 is systematic violations of the Islamabad memorandum by the United States and Israel.
This decision instantly shattered the fragile hopes for de-escalation that markets had priced in just a few days earlier. Only three days prior, on June 17, a 14-point memorandum was signed stipulating that Tehran would guarantee safe passage for commercial vessels during the first 60 days in exchange for the lifting of the naval blockade on Iranian ports. Shipping had begun to recover, and energy prices were declining. Now, that positive momentum has been nullified.
Why Did Iran Resort to Extreme Measures?
Tehran's official position is that the United States and Israel violated the terms of the truce. The Iranian command describes the closure of the strait as a "first step" and warns of harsher retaliatory measures if aggression continues. Particular attention is drawn to Israel's ongoing actions in Lebanon, which Tehran views as a direct violation of the spirit and letter of the memorandum.
It is worth recalling that approximately 21 million barrels of oil and petroleum products pass through the Strait of Hormuz 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 Persian Gulf countries.
Markets in a Turbulence Zone
The closure of the strait is not just a geopolitical drama but a direct blow to global supply chains. Markets have already reacted: oil futures are rising, while Bitcoin and other risk assets are showing increased volatility. If the situation drags on, we could see a repeat of the 2022 scenario, with a sharp spike in energy prices and a flight of capital into safe-haven assets.
However, it is worth noting that there is still no official confirmation of the strait's closure from independent sources. U.S. Vice President JD Vance has already issued a denial, stating an intention to continue negotiations. This creates a classic "who will outplay whom" situation—Iranian bluff or a real threat?
My analysis: Markets are underestimating the likelihood of a prolonged crisis. Even if the closure of the strait is a tactical move to strengthen the negotiating position, the mere fact of such an announcement sharply increases the risk premium in oil prices. Investors should prepare for a period of high volatility and reconsider their hedging strategies. The situation will become clearer in the next 48 hours, but the "hawkish" scenario is becoming increasingly likely.