Iran has closed the Strait of Hormuz for a second time, accusing the United States of violating the US-Iran memorandum of understanding by failing to compel Israel to halt military operations in Lebanon.
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Iran shuts Strait of Hormuz for 2nd time as US-Iran deal frays
Iran shut the Strait of Hormuz to vessel traffic Saturday, marking the second closure in less than a week, after accusing the United States of violating the 14-point memorandum of understanding signed Wednesday by failing to restrain Israeli military operations in Lebanon.
"The United States' bad faith and its clear breach of its commitment to implement the first clause of the memorandum ending the war" prompted the closure, Iran's Khatam al-Anbiya Central Headquarters said in a statement carried by state media, adding that this was "the first step in responding to the enemy's breach of its commitments."
Article 1 of the MOU, which President Donald Trump and Iranian President Masoud Pezeshkian signed electronically Sunday and formally Wednesday, requires "the immediate and permanent termination of military operations on all fronts, including in Lebanon." Neither Israel nor Hezbollah were parties to the agreement. Israeli Prime Minister Benjamin Netanyahu has said troops will not withdraw from the security zone Israel established in southern Lebanon, while Hezbollah has fired more than 50 projectiles at Israeli forces since Friday, according to the Israeli military, which struck more than 80 Hezbollah targets in response.
The Strait of Hormuz handles about 21 percent of global crude oil and liquefied natural gas supplies. Just 25 commercial vessels transited the waterway on June 18 — the highest single-day count since mid-April but still a fraction of prewar traffic — after Iran reopened the strait Wednesday under the MOU's terms. The closure threatens to reverse that fragile recovery and reintroduce supply disruption premiums into oil markets.
What the MOU required — and what happened
The MOU's Paragraph 1 commits both sides to "ensuring the territorial integrity and sovereignty of Lebanon." Paragraph 5 required Iran to arrange safe passage for commercial vessels with no charge for 60 days. In exchange, the US agreed under Paragraph 4 to begin removing its naval blockade within 30 days and under Paragraph 10 to issue waivers for Iranian crude oil exports.
Iran's Supreme National Security Council said Friday the regime signed the MOU with "complete distrust of the faithless and treaty-breaking enemy" and warned that "any deviation or violation" would bring reciprocal action. Supreme Leader Mojtaba Khamenei claimed Trump struck the deal "out of desperation," according to state media. Trump denied that characterization, posting on Truth Social that "Iran did" meet out of desperation and that they "are FINISHED."
The first round of technical talks, which had been scheduled for Friday in Switzerland with Vice President JD Vance expected to lead the US delegation, was postponed. The White House cited logistical issues; Iranian officials said the delay was due to the fighting in Lebanon. Special envoy Steve Witkoff traveled to Switzerland anyway, and Swiss officials confirmed Saturday that discussions continue at Bürgenstock, declining to identify participants.
Market stakes and forward scenario
The last time Iran closed the strait — from late February until Wednesday — Brent crude prices surged more than 30 percent as tanker traffic collapsed and insurance premiums for Gulf transits soared. The MOU's Paragraph 6 promises a $300 billion reconstruction and economic development plan for Iran, contingent on a final deal within 60 days. That timeline now looks uncertain.
Mediators including Pakistan, Saudi Arabia, Turkey and Egypt are due to meet in Cairo on Sunday. Pakistan's Interior Minister Mohsin Naqvi traveled to Tehran on Saturday for talks with Iranian Foreign Minister Abbas Araqchi. The US State Department confirmed that Lebanon-Israel talks scheduled for June 23-25 in Washington remain on track, though Hezbollah has said it will not accept direct negotiations with Israel while Israeli forces remain on Lebanese soil.
For oil markets, the key question is whether this second closure represents a temporary protest or a sustained blockade. Iran's military command warned of "further measures" if aggression continues. The 60-day negotiation window in the MOU allows for extensions by mutual consent, but with both sides accusing each other of bad faith, the path to a final deal has narrowed considerably since the document was signed just three days ago.
This article is for informational purposes only and does not constitute investment advice.
[1] Iran's Foreign Ministry: The United States fails to restrain Israel, violating the Memorandum of Understanding[2] Iran says it's closing Strait of Hormuz again as Hezbollah and Israel trade...[3] Read the 14-point memorandum of understanding between the United States and Iran[4] Iran threatens to launch missiles and block Hormuz Strait[5] Iran closes Strait of Hormuz over ceasefire violations
