Iran blocks the Strait of Hormuz: the fragile ceasefire collapses
On June 20, 2026, the Khatam al-Anbiya Central Command announced the closure of the Strait of Hormuz to shipping. The reason cited was alleged systematic violations of the recently signed Islamabad Memorandum by the United States and Israel. This decision instantly shattered hopes for de-escalation and once again put global energy markets at risk.
Just a few days earlier, on June 17, a 14-point Islamabad Memorandum had been agreed upon, which stipulated the lifting of the US naval blockade on Iranian ports and guaranteed the free passage of commercial vessels through the strait for the first 60 days. Markets reacted immediately: oil prices fell, and shipping began to recover. However, as events showed, this truce proved illusory.
Statement from the Military Command
The Khatam al-Anbiya Central Command—Iran's highest joint headquarters—described the closure of the strait as a "first step" and warned of further measures if aggression continued. Iranian state media unanimously supported this position. The conflict escalated following US and Israeli strikes in late February 2026 and the subsequent imposition of earlier restrictions on passage through the strait. Now, Tehran directly points to Israeli military operations in Lebanon as a violation of the memorandum.
The importance of the Strait of Hormuz to the global economy cannot be overstated. Approximately 21 million barrels of oil and petroleum products are transported through it daily—about 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 pass through this route. Alternative routes for Gulf countries are virtually nonexistent, making the strait the "Achilles' heel" of global energy supply.
Disagreements over the Islamabad Memorandum
Earlier, the signing of the memorandum led to a short-term decline in oil prices. However, the current escalation once again focuses market attention on supply risks. The closure of the strait, even partial, could trigger a prolonged supply shock, the consequences of which we have already seen in past crises.
Notably, US officials, including Vice President JD Vance, have so far denied any violation of the memorandum on their part and point to the opposite. This creates an information vacuum and heightens uncertainty. The market, which had priced in hopes of a détente, is now forced to reassess geopolitical risks, and, based on my observations, this reassessment will be painful and swift.
Analytical Commentary: This incident is a classic example of how geopolitical brinkmanship on the verge of war instantly impacts global supply chains. Investors in energy commodities and, indirectly, cryptocurrencies (which are sensitive to liquidity amid oil shocks) should brace for heightened volatility. The fragile truce in the Middle East is not a foundation for a stable market but merely a pause before the next storm.