Iran officially closes the Strait of Hormuz: the fragile ceasefire has collapsed
On June 20, 2026, the Khatam al-Anbiya Central Command announced the complete closure of the Strait of Hormuz to shipping. The reason cited was violations by the United States and Israel of the terms of the recently signed Islamabad Memorandum.
This decision is a direct blow to market hopes for de-escalation. Just a few days ago, oil prices and risky assets, including cryptocurrencies, were pricing in the positive sentiment from the reached agreement. Now, we are witnessing a sharp reversal that could trigger a new wave of volatility.
Statement from the Military Command
Iran's Supreme Joint Staff called the closure of the strait a "first step" and warned of additional measures if "aggression" continues. Recall that the conflict escalated after US and Israeli strikes in late February 2026, which were followed by earlier restrictions on vessel passage.
Approximately 21 million barrels of oil and petroleum products are transported through the Strait of Hormuz daily — about 20% of global consumption and a quarter of all seaborne oil trade, according to the U.S. Energy Information Administration. Besides oil, major shipments of liquefied natural gas from Qatar and the UAE pass through the strait. There are virtually no alternative routes for Gulf countries, making this region a critical point for global energy supply.
Collapse of the Islamabad Memorandum
The 14-point 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 involved the lifting of the US naval blockade of Iranian ports. Vessel traffic began to recover, contributing to a decline in energy prices.
The new statement from the Iranian army effectively nullifies these agreements. Tehran views Israel's ongoing actions in Lebanon as a violation of the memorandum. Previously, the agreement quickly led to lower oil prices, but now the situation once again draws attention to the issue of supply shortages amid a potential long-term shock.
However, it is worth noting that there is no official confirmation of the strait's closure from international sources yet. US Vice President JD Vance suggests the opposite, adding uncertainty to the markets.
My analysis: Markets celebrated the victory of diplomacy too early. The closure of Hormuz is not just a geopolitical risk, but a direct trigger for rising energy prices, which will inevitably impact inflation expectations and, consequently, the dynamics of risky assets, including Bitcoin. Investors should prepare for increased volatility in the coming weeks.