Iran blocks the Strait of Hormuz: the fragile truce has collapsed
The Khatam al-Anbiya Central Command — Iran's highest joint headquarters — has officially announced the closure of the Strait of Hormuz to shipping. The reason cited is systematic violations of the recently signed Islamabad Memorandum by the United States and Israel. This decision not only nullifies the fragile ceasefire but also brings the world back to the brink of a major energy crisis.
This move came as a complete surprise to markets, which just a few days ago had optimistically welcomed news of de-escalation and had priced in a reduction in geopolitical risks for oil. Now, the situation is changing dramatically, and traders will have to revise their forecasts.
What lies behind Tehran's statement
The Iranian military command described the closure of the strait as a "first step" and threatened new, harsher measures if "aggression" continues. The conflict escalated after a series of strikes by the United States and Israel in late February 2026, which led to the introduction of previous, milder restrictions on vessel passage.
To recall, approximately 21 million barrels of oil and petroleum products are transported daily through the Strait of Hormuz — this accounts for about 20% of global liquid hydrocarbon consumption and a quarter of all seaborne oil trade. Additionally, major export shipments of liquefied natural gas from Qatar and the UAE pass through the strait. There are virtually no alternative routes for Persian Gulf countries, making this region a critical point for global energy security.
The Islamabad Memorandum: a hope that failed
The 14-point Islamabad Memorandum, agreed upon around June 17, 2026, stipulated that Iran would make every effort to ensure the safe and free passage of commercial vessels for the first 60 days. In return, the United States was to lift the naval blockade of Iranian ports. Vessel traffic indeed began to recover, leading to a short-term decline in energy prices.
However, according to Tehran, the ongoing actions of Israel in Lebanon and violations by Washington rendered the memorandum a dead letter. Now, the market once again faces the prospect of a potential long-term supply shock.
My analysis: Markets, unfortunately, too hastily believed in the durability of the ceasefire. The closure of Hormuz is not just a tactical move but a signal that Iran is ready to go all the way, using its main geopolitical trump card. In the short term, we will likely see a sharp spike in oil prices and increased volatility. For the crypto market, this will also be a test of strength, as rising geopolitical tensions traditionally boost demand for safe-haven assets but simultaneously create liquidity risks. We are closely watching the Fed's response and the actions of strategic reserves.