Iran blocks the Strait of Hormuz: fragile truce collapses, oil markets on the brink
June 20, 2026 — a landmark date for global energy security. The Khatam al-Anbiya Central Command, the joint headquarters of Iran's armed forces, has officially announced the complete closure of the Strait of Hormuz to shipping. The reason is alleged systematic violations of the Islamabad agreement by the United States and Israel.
This decision instantly dashes hopes for de-escalation that markets had priced in just a few days ago. Iran calls this step the "first phase" and openly warns of further measures if "aggression" continues. The conflict, which began with U.S. and Israeli strikes in late February 2026, has once again entered an acute phase.
Geopolitical rift and the world's energy artery
The Strait of Hormuz is not just a geographical point. Approximately 21 million barrels of oil and petroleum products pass through it daily, accounting for about 20% of global consumption and a quarter of all maritime trade in "black gold," according to the U.S. Energy Information Administration. Additionally, enormous volumes of liquefied natural gas from Qatar and the UAE transit through the strait. There are virtually no alternative routes for Persian Gulf countries, making this region the epicenter of any price volatility in commodity markets.
Just three days earlier, on June 17, a 14-point Islamabad memorandum was agreed upon. The document stipulated that Iran would make every effort to ensure the safe passage of commercial vessels during the first 60 days, while the United States would lift the naval blockade of Iranian ports. Ship traffic began to recover, leading to a temporary decline in energy prices. However, Tehran's current statement nullifies these agreements, viewing Israel's ongoing actions in Lebanon as a direct violation of the memorandum.
Market consequences and valuation gap
The Islamabad memorandum had previously triggered a rapid drop in oil prices, but the situation is now changing dramatically. The market once again faces the prospect of a prolonged supply shock. Notably, amid Iran's statement, U.S. Vice President JD Vance publicly contradicts it, denying official confirmation of the blockade. This information gap only heightens uncertainty.
My expert assessment: The closure of the Strait of Hormuz is not just a tactical move but a direct threat of a global recession. If the blockade lasts more than a few days, we will see an explosive rise in oil prices to levels that trigger a chain reaction across all risk assets, including cryptocurrencies. In the short term, Bitcoin may temporarily strengthen as a hedge against geopolitical chaos, but a long-term liquidity downturn due to the energy crisis will hit all markets.