Geopolitical triggers such as the Strait of Hormuz can affect forex market, oil prices, and investor sentiment within seconds. With rising tensions amid Iran taking back control over this vital shipping route, attention is turning to what effect this might have on the markets. Forexdrift analyzes the effects that closing the Strait of Hormuz has on foreign exchange and commodity prices. Stay tuned for more information about this developing story.
Iran says it has Strait of hormuz closed again, calling the decision a response to a continued blockade of its ports by the United States. This development adds to growing concerns that the Strait of hormuz closed situation could escalate further, impacting global trade and oil supply chains.
The Iranian military on Saturday said control of the strategic waterway, through which 20 percent of globally traded oil transits, has “returned to its previous state”, with reports saying Iranian gunboats fired at a merchant vessel as it attempted to cross. Reports across media, are closely tracking how the Straits of hormuz closed situation could influence global markets.
The closure of the Strait came hours after it was reopened, with more than a dozen commercial ships passing through the waterway, after a US-mediated 10-day ceasefire deal was reached between Israel and Lebanon. However, uncertainty remains as the hormuz Strait closed status continues to shift rapidly.
The Islamic Revolutionary Guard Corps (IRGC) on Saturday said in a statement, cited by Iranian state media, that the ongoing US blockade of Iranian ports represented “acts of piracy and maritime theft”, adding that the control over Hormuz is “under the strict management and control of the armed forces”. This comes amid rising tensions involving the US Navy in Strait of hormuz and increased monitoring of US ships in Strait of hormuz.
“Until the US restores full freedom of navigation for vessels travelling from Iran to their destinations and back, the status of the Strait of Hormuz will remain tightly controlled and in its previous condition,” it said. Analysts suggest the Iran closed hormuz move could have long-term geopolitical consequences.
By 10:30 GMT on Saturday, at least eight oil and gas tankers had crossed the Strait, but at least as many ships appeared to have turned back, having begun to exit the Gulf, the AFP news agency reported. This reflects the uncertainty caused by the Straits of hormuz closed developments.
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Later on Saturday, India summoned the Iranian ambassador to protest against a “shooting incident” involving two Indian-flagged merchant vessels in the Strait, India’s Ministry of External Affairs said. Concerns are rising globally about what countries use the Strait of hormuz, as disruptions impact multiple economies.
The ministry said in a statement that Secretary Vikram Misri summoned the Iranian ambassador and “conveyed India’s deep concern” over the incident.
New Delhi also urged Iran to “resume at the earliest the process of facilitating India-bound ships across the Strait”, the statement said, adding that the envoy “undertook to convey these views to the Iranian authorities”.
India was among the nations Iran had labelled “friendly” and allowed several Indian-flagged vessels to pass through the Strait of Hormuz. Some ships with flags from Malaysia, China, Egypt, and South Korea have also been allowed to pass through the Strait—highlighting again what countries use the Strait of hormuz in global trade networks.
The toing and froing over the Strait cast doubt on US President Donald Trump’s optimism the day before, that a deal to end the US-Israel war on Iran was “very close”. Increased deployment of the US navy Strait of hormuz has also raised tensions further.
Trump had celebrated the reopening of the Strait on Friday, but warned the US attacks would resume until Iran agreed to a deal, which included its nuclear programme. The presence of the US Navy in Straits of hormuz continues to play a key role in maintaining control over the region.
“Maybe I won’t extend it,” Trump told reporters on board Air Force One about the temporary ceasefire agreement in place. “So you’ll have a blockade, and unfortunately, we’ll have to start dropping bombs again.”
Asked whether a potential deal could be made in this short timeframe, Trump said: “I think it’s going to happen.”
But Iran says no date has been agreed for another round of peace talks, accusing the US of “betraying” diplomacy in all negotiations. This ongoing tension, combined with US Navy Iran Strait of hormuz developments, keeps markets volatile.
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The conflicting and changing reports about the Strait and how much freedom ships have to transit through it have deterred many vessels from crossing, according to John-Paul Rodrigue, a maritime shipping specialist at Texas A&M University. The unclear situation reinforces fears that the hormuz Strait closed condition may persist.
“Ships have been attempting transit since the announcement, but it looks like many of them are heading back because the situation is unclear,” Rodrigue told Al Jazeera. “There is contradictory information being issued by all parties.”
Reporting from Tehran, Al Jazeera’s Tohid Asadi said “uncertainty is the name of the game” as far as the Strait of Hormuz is concerned. The ongoing Strait of hormuz closed narrative continues to dominate geopolitical discussions.
“Iran is looking for a comprehensive end to the war across the region, security assurances, sanctions relief, the unfreezing of frozen assets, regional relations – and on top of all of that – the nuclear dossier and Iran’s stockpile of highly enriched uranium,” he said.
“But right now, uncertainty is the name of the game. The fragile situation makes it hard to talk about the possibility of successful negotiations down the road.”
The US has intercepted an Iranian-flagged cargo ship in the Gulf as part of its naval blockade, Donald Trump has said. This highlights the increasing activity of the US Navy in Strait of hormuz and the strategic positioning of US ships in Strait of hormuz.
The US president wrote on his Truth Social platform that the Touska was seized by the US Navy after failing to respond to a warning to stop. Iran said it was a violation of the ceasefire and it would retaliate soon for the “act of armed piracy”. The escalation further strengthens the narrative that Iran closed hormuz in response to pressure.
The announcement came after the White House confirmed US Vice-President JD Vance would lead another delegation for a second round of talks on ending the war with Iran in Pakistan.
Tehran has not yet confirmed its attendance. Iranian state media has reported that officials will not participate while the US blockade remains in place.
“Today, an Iranian-flagged cargo ship named TOUSKA, nearly 900 feet long and weighing almost as much as an aircraft carrier, tried to get past our Naval Blockade, and it did not go well for them,” Trump wrote.
He added that the US had given the vessel fair warning to stop, which was ignored, “so our Navy ship stopped them right in their tracks by blowing a hole in the engine room.”
“The TOUSKA is under US Treasury Sanctions because of their prior history of illegal activity. We have full custody of the ship, and are seeing what’s on board!”
US Central Command later released footage it said showed a naval vessel intercepting a cargo ship. In the footage, a gun can be seen firing in the direction of the cargo ship, reinforcing the seriousness of the US navy Iran Strait of hormuz situation.
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