Iran closes the Strait of Hormuz again: the fragile truce has collapsed
On June 20, 2026, the Khatam al-Anbiya Central Command—Iran's highest joint headquarters—officially announced the closure of the Strait of Hormuz to shipping. The reason cited was violations of the recently agreed Islamabad Memorandum by the United States and Israel.
This decision came as an unexpected blow to markets, which just days earlier had begun pricing in a de-escalation of the conflict. The closure of the strait directly threatens global oil transit and creates a new wave of volatility in energy markets.
Statement from the Military Command
The Khatam al-Anbiya Command described the closure as a "first step" and warned of further measures if aggression continues. All key Iranian state media reported the decision. The conflict escalated after U.S. and Israeli strikes in late February 2026, against which Tehran had already imposed earlier restrictions on passage through the strait.
Approximately 21 million barrels of oil and petroleum products are transported through the Strait of Hormuz daily—about 20% of global liquid hydrocarbon consumption and roughly a quarter of all seaborne oil trade, according to the U.S. Energy Information Administration. In addition to oil, major export shipments of liquefied natural gas from Qatar and the UAE pass through the strait.
Historically, any disruptions in this region have amplified price volatility, as alternative routes for Persian Gulf countries are virtually nonexistent.
Disagreements Over the Islamabad Memorandum
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 U.S. to lift the naval blockade of Iranian ports.
Ship traffic began to recover after this agreement was reached, temporarily lowering energy prices. However, Tehran views Israel's ongoing actions in Lebanon as a direct violation of the memorandum's terms.
Earlier, the agreement quickly led to a drop in oil prices, but the current situation once again draws attention to supply risks amid a potential prolonged shock. It is important to note that there is no independent confirmation of the strait's closure yet—U.S. Vice President JD Vance has indicated the opposite.
Analyst Comment: Markets have fallen into a trap of false security. If Iran actually follows through on the threat, we could see a sharp spike in oil prices above $100 per barrel within a week. Traders should prepare for extreme volatility and reassess their risks in the coming days.