Iran has blocked the Strait of Hormuz: the ceasefire has collapsed, oil markets in shock
June 20, 2026 — The Khatam al-Anbiya Central Command announced the complete closure of the Strait of Hormuz to shipping. The official reason is systematic violations of the Islamabad memorandum by the United States and Israel. This decision instantly shattered the fragile hopes for de-escalation in the region that had been priced into energy commodities just days earlier.
The Strait of Hormuz is a key artery of global energy supply. 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 seaborne oil trade, according to the U.S. Energy Information Administration. Additionally, major export shipments of liquefied natural gas from Qatar and the UAE transit through the strait.
Why the ceasefire failed
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 called for the lifting of the U.S. naval blockade of Iranian ports. Shipping began to recover, which helped temporarily lower energy prices.
However, 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. The closure of the strait is described as a "first step," with a warning of further measures if the aggression continues.
Notably, there is no official confirmation of the blockade from Washington yet. U.S. Vice President JD Vance indicates the opposite, adding uncertainty to an already explosive situation.
Market implications and forecast
The previous memorandum quickly led to a decline in oil prices, but the current escalation once again brings the risk of a long-term supply shock to the forefront. There are virtually no alternative routes for Gulf countries, so any blockade of the strait is a direct blow to global supply chains.
My analysis: Markets are likely to react with a sharp increase in volatility and a speculative surge in oil and gas prices. Cryptocurrencies, especially Bitcoin, may act as a hedge against geopolitical uncertainty, but in the short term, panic selling of risky assets cannot be ruled out. The situation resembles a classic "black swan" for energy markets.