Iran has announced the closure of the Strait of Hormuz: Islamabad's deal is falling apart.
June 20, 2026 — The Khatam al-Anbiya Central Command, Iran's highest joint military headquarters, has officially announced the closure of the Strait of Hormuz to all commercial vessels. The reason cited is systematic violations of the Islamabad Memorandum by the United States and Israel.
This decision is a direct blow to the fragile truce that markets had begun pricing in just a few days ago. The closure of the strait not only nullifies recent hopes for de-escalation but also brings back the most severe scenarios for global energy supply chains to the forefront.
First Step Toward Escalation
In its statement, the Khatam al-Anbiya Command described the current measures as a "first step." The military directly warned of further actions if the "aggression" continues. The conflict escalated following U.S. and Israeli strikes in late February 2026, leading to tighter restrictions on vessel passage.
It is important to understand: approximately 21 million barrels of oil and petroleum products pass through the Strait of Hormuz daily — accounting for about 20% of global consumption and a quarter of all seaborne oil trade, according to the U.S. Energy Information Administration. In addition to oil, massive shipments of liquefied natural gas from Qatar and the UAE transit through the strait. Alternative routes for Gulf countries are virtually nonexistent, making any disruption in this region critical for global energy security.
The Islamabad Memorandum: A Deal That Failed
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 document also envisioned the lifting of the U.S. naval blockade of Iranian ports. Ship traffic began to recover, helping to 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. Markets had already responded to the previous deal with lower oil prices, but now the situation once again draws attention to supply risks amid a potential prolonged shock.
Notably, the closure of the strait has not yet been officially confirmed: U.S. Vice President JD Vance suggests otherwise, creating informational uncertainty. However, the very fact of Iran's statement is a powerful signal to the market that the truce has been broken, and volatility in energy markets will inevitably return.
Analytical Commentary: The oil market, and consequently the cryptocurrency market — which is highly sensitive to macroeconomic shocks — is now entering a zone of high uncertainty. If the blockade of Hormuz lasts more than a week, we could see a sharp spike in energy prices, triggering a flight from risk assets, including bitcoin. Traders should prepare for increased volatility and reconsider their short positions on oil.