A fragile 48-hour reopening of the world’s most critical oil chokepoint has collapsed, sending crude prices soaring and erasing hopes of a rapid de-escalation in the Middle East.
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Iran Re-Closes Hormuz Strait, Oil Spikes 9% as Ceasefire Falters
Iran closed the Strait of Hormuz for the second time in three days and attacked commercial tankers, reversing a brief reopening that had sent oil prices down more than 9 percent. The move by the Islamic Revolutionary Guard Corps follows a US declaration that its naval blockade of Iranian ports would remain, shattering a fragile ceasefire and pushing Brent crude back toward $100 a barrel.
"The whiplash from open to closed in 48 hours shows the market can no longer count on reliable passage," Bob McNally, president of Rapidan Energy Group, said in a note. "Iran has shown it can and will use the strait as a weapon, introducing a structural volatility that we haven't seen on this scale before."
The reversal sent Brent crude futures spiking over 9 percent, erasing a brief relief rally to $90 a barrel seen on April 17. The turmoil also rippled through digital asset markets, with Bitcoin falling from a high of $78,000 as investors shed risk. The closure chokes off nearly one-fifth of global oil supply, with vessel traffic plummeting from a pre-conflict average of 130 ships daily to single digits, according to data from the Hormuz Strait tracker.
The immediate risk is a return to the supply-driven price spikes that saw Brent crude exceed $120 a barrel earlier in the conflict. With a US-Iran ceasefire set to expire next week and negotiations stalled over uranium enrichment and sanctions, the closure signals that energy infrastructure remains a primary point of leverage, raising the prospect of sustained high energy prices and slower global growth warned of by the IMF.
From Ceasefire Hopes to Renewed Attacks
The whiplash in the strategic waterway began April 17, when Iranian Foreign Minister Abbas Araghchi announced the strait was “completely open,” leading to a sharp drop in oil prices. The optimism was short-lived. By April 19, after US President Donald Trump confirmed a US naval blockade of Iranian ports would continue, Iran’s IRGC announced it was shutting the strait again, citing American “breaches of trust.”
The closure was enforced with violence. The UK Maritime Traffic Organization reported that IRGC gunboats fired on one tanker, while a second vessel was struck by a projectile. India’s government summoned Iran’s ambassador after confirming two of its flagged vessels were involved in incidents. In a further escalation, a senior Iranian official told CNN that Tehran would prioritize passage for vessels that pay a fee, effectively attempting to monetize control of the chokepoint.
Diplomatic Impasse Hardens
The rapid escalation at sea reflects a hardening stalemate in diplomatic talks, with a ceasefire deadline looming. According to officials familiar with the talks, three major hurdles remain: the fate of Iran’s roughly 400-kilogram stockpile of 60 percent enriched uranium, the duration of enrichment curbs, and the security of maritime passage. The US has proposed a 20-year pause on enrichment, which Iran rejected, countering with a five-year offer.
The conflicting messages on the strait’s status also expose internal fractures within Iran’s leadership. Danny Citrinowicz, an expert at Israel’s Institute for National Security Studies, told CNN the incident highlights “significant internal tensions” and growing distrust between the more pragmatic political leadership and the hardline IRGC, which appears to hold the balance of power.
This article is for informational purposes only and does not constitute investment advice.
[1] Iran reopens Strait of Hormuz during ceasefire, oil prices plunge - World Oil[2] Vessel traffic through Strait of Hormuz remains limited amid blockade of Iranian ports - ICIS[3] The Bigger Lesson For Energy Behind Iran’s Control Over the Strait of Hormuz - Time Magazine[4] Ceasefire deadline looms as Iran closes Strait of Hormuz again[5] Iran conflict escalates, Strait of Hormuz closure impacts oil markets[6] Iran renews restrictions on Strait of Hormuz as peace talks approach a critical juncture
