Cut off the global energy lifeline! Iran annuls the 1968 Hormuz Strait shipping agreement, lays naval mines to seize control.

According to the latest report by The New York Times, the global energy chokepoint, the Strait of Hormuz, is at the center of a geopolitical storm. Iran recently issued a hardline declaration that it would refuse to recognize the international shipping route agreement (the Traffic Separation Scheme) signed in 1968, and it has instead deployed naval forces to lay mines and block the original shipping lanes. Iranian authorities reiterated that they have “permanent control” over the strait and rejected alternative corridors that the United States and Oman have tried to establish. This move has not only set off alarms across the global energy supply chain, but also pushed the fragile U.S.-Iran ceasefire to the brink of collapse.
(Background: Wintermute Market Report — Fed Turns Hawkish, Iran Agreement Collapse Hits Crypto; Markets Wait for PCE Data to Save the Day)
(Context Supplement: Trump Confirms Lifting of the Strait of Hormuz Blockade: Iran Agrees to Indefinite Nuclear Facility Inspections; Frozen Funds to Be Used Entirely to Buy “U.S. Agricultural Products”)

Table of Contents

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• Overturning 60-Year-Old Rules, Iran Rejects the “Traffic Separation Scheme”
• A Pre-Revolution Legacy No Longer Applies! Iran Firmly Declares Permanent Control
• Laying Mines to Block Waterways, Rejecting the U.S. “Parallel Corridor”

As global energy markets closely watch the U.S. election and inflation data, the powder keg of Middle East geopolitics has been reignited. According to an in-depth report by The New York Times reporter John Yoon dated June 30, 2026, Iran is attempting—at an unprecedented level of hardline posture—to upend the historical rules governing the world’s most important energy transport route—the Strait of Hormuz.

Overturning 60-Year-Old Rules, Iran Rejects the “Traffic Separation Scheme”

The focus of this conflict centers on an international agreement with nearly 60 years of history. Around 1968, the Iranian government at the time negotiated and reached an agreement with Oman officials, which was then approved by the United Nations’ International Maritime Organization (IMO) as the “Traffic Separation Scheme.”

At its narrowest point, the Strait of Hormuz is only 24 miles wide, and there are no neutral international waters in the middle of the strait; it is entirely overlapped by the sovereign waters of Iran and Oman. Originally, the agreement was a technical and legal solution intended to clearly separate shipping lanes and prevent massive supertankers from colliding in this narrow waterway. For decades, this agreement has been a cornerstone for ensuring stable transport of global oil and natural gas.

A Pre-Revolution Legacy No Longer Applies! Iran Firmly Declares Permanent Control

However, Iran has now decided to break the status quo. This week, Iranian Deputy Foreign Minister Kazem Gharibabadi explicitly reiterated that Iran has “permanent control” over the Strait of Hormuz and formally rejected the internationally recognized shipping lanes dating back to 1968.

Gharibabadi pointed out that the old agreement allowed foreign warships to pass freely, which seriously threatened Iran’s national security; more importantly, the agreement was signed before the Islamic Revolution of 1979 (i.e., before the overthrow of the pro-U.S. Iranian king and before the establishment of theocratic rule), and therefore no longer fits the current national situation. He made a hardline message to Oman’s authorities: “Those routes must be completely changed,” and called for expert and technical talks to redraw the sphere of influence in the strait.

Ali Vaez, Director of the Iran Project at the International Crisis Group, analyzed that in 1968 Iran was the undisputed military power in the region and fundamentally did not need to treat geography as a bargaining chip; but now, with the shift in time and circumstances, Iran is actively using this strait as a weapon to maximize its geopolitical interests.

Laying Mines to Block Waterways, Rejecting the U.S. “Parallel Corridor”

Iran did not stop at verbal warnings, but instead carried out an extremely dangerous, substantive military action. The New York Times reports that Iran has placed naval mines in the strait, effectively blocking the traditional waterways established in 1968, and has threatened to take action against vessels that do not comply with its designated new routes.

To counter Iran’s blockade, the U.S. and Oman have recently attempted to establish an “alternative corridor” in Oman’s sovereign waters on the southern side of the strait, with escort provided by U.S. forces. However, Gharibabadi immediately stated that Iran would never recognize any parallel route that has not received its consent.

Regarding Iran’s strategic intentions, Jennifer Parker, a former naval officer from the University of Western Australia’s Defense and Security Institute, believes that Iran is trying to “legalize” its military and political arguments, aiming to secure the greatest leverage at the negotiation table with the United States in the future. However, at a time when both the U.S. and Iran are maintaining a fragile ceasefire, Iran’s risky move at this energy chokepoint could trigger a black swan event with repercussions for the global economy at any moment.