1 hour ago
2
Iran just raised the stakes on the most dangerous game of chicken in global energy markets. Deputy Speaker Ali Nikzad announced on May 7 that Iran has effectively closed the Strait of Hormuz and warned that the Bab al-Mandab Strait could be next.
That’s not one but two of the world’s most critical oil chokepoints under threat simultaneously. The Strait of Hormuz handles roughly 20% of global oil supply. The Bab al-Mandab accounts for about 10%. Together, they represent nearly a third of the world’s seaborne oil traffic.
For crypto traders who think this is purely an energy story, think again. Bitcoin has already demonstrated sharp sensitivity to Hormuz developments, surging past $78,000 during earlier reopening announcements and dropping hard on re-closures. Reported liquidation events in the crypto market hit $593 million as Bitcoin whipsawed on Iran-related news.
What’s actually happening in the strait
The Strait of Hormuz, a narrow waterway between Iran and Oman, has faced effective closures and restrictions since February 2026. Iran’s Revolutionary Guard Corps has been enforcing these restrictions through VHF radio warnings to tankers and, as of March, official closure confirmations.
The escalation fits within broader regional tensions involving the US, Israel, and Iranian-backed groups including Hezbollah and the Houthis. The Houthis, Iran’s allies in Yemen, have already been exerting influence over the Bab al-Mandab Strait, which connects the Red Sea to the Gulf of Aden.
Nikzad framed the potential Bab al-Mandab closure as conditional, suggesting it would happen “if necessary” based on the trajectory of regional hostilities.
Iran’s crypto pivot adds another layer
Iran has reportedly been exploring the collection of crypto-based transit fees from oil tankers navigating these waterways, a concept that began taking shape around April 2026.
In English: Iran may be looking to charge ships in Bitcoin or other digital currencies to pass through chokepoints it controls. This would serve a dual purpose. It sidesteps US dollar-denominated sanctions infrastructure, and it creates a novel demand driver for crypto assets tied directly to physical commodity flows.
What this means for investors
Bitcoin’s price action around strait closures and reopenings has been dramatic enough to generate nearly $600 million in liquidations in a single event. For oil markets, prolonged closures of Hormuz alone would constrain a fifth of global supply. Adding Bab al-Mandab to the equation could push oil prices into territory that would ripple through every sector of the global economy.
The risk runs in both directions. A diplomatic resolution or military intervention that reopens both straits could trigger the same kind of violent unwind that produced those $593 million in liquidations.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
English (US) · 