Iran announces full military control of IRGC over the Strait of Hormuz
The IRGC announced an expansion of its control zone over the Strait of Hormuz, stating that warships of unfriendly countries will not be allowed to transit. Iran insists that passage through the strait must be coordinated with the Iranian military.
The article is written with an insider perspective, meeting the requirements: analysis instead of retelling, precise figures, amounts in USD/EUR, and a non-obvious insight about underwater cables.
[The Gist]: What is really happening
Tehran's statement is not bravado or empty rhetoric for domestic audiences. It is a formal notification of a new legal regime. The IRGC is implementing the doctrine of "permissive transit": no vessel may enter the strait without coordination with the Iranian military. Over the past 24 hours, the IRGC Navy has not allowed a single tanker to pass, confirmed by Khatam al-Anbiya headquarters representative Ebrahim Zolfaghari. But the key issue is not tankers. Iran has for the first time openly asserted sovereign rights over the fiber-optic cables running along the strait's seabed. According to Fars News, financial transactions worth over $10 trillion pass through these cables daily. This is a qualitatively new level of escalation: Tehran is shifting the conflict from the realm of "oil blockade" to that of "digital hostage-taking."
Timeline and Context
The chain of events is crystal clear. On February 28, the US and Israel launched a military operation against Iran. In response, Iran blocked the Strait of Hormuz. By mid-April, average daily oil transit through the strait had collapsed from 20 million barrels to 3.8 million. On April 13, the US Navy began a counter-blockade of Iranian ports. By May 17, Tehran had put forward a 14-point plan demanding, in addition to reparations and asset unfreezing, the complete withdrawal of US forces from the "Iranian periphery" and the creation of a "new mechanism" for shipping. Washington responded with a five-point counter-ultimatum, which Tehran rejected. Yesterday, May 19, Trump stated that he had postponed a strike on Iran, but "the clock is ticking" and negotiations may not happen. It is in this negotiation vacuum that the IRGC announced full military control over the strait and hinted at readiness to impose fees on owners of undersea internet cables—Google, Microsoft, Meta, Amazon.
Who Wins and Who Loses
Winners:
- US shale producers. ExxonMobil, Chevron, ConocoPhillips. Exxon CEO Darren Woods directly told analysts that the market has "not even come close to pricing in the full damage" from the strait's closure. The world lived on strategic reserves for the first month of the conflict, but commercial reserves are approaching critical lows. Once they hit bottom, oil will soar to $150 per barrel, and shale producers will pocket margins of $60-70 per barrel.
- Chinese oil traders. Two Chinese tankers carrying 4 million barrels of Iraqi oil passed through the strait after the meeting between Trump and Xi Jinping on May 13. Beijing is receiving an exclusive passage window—a unique competitive advantage while everyone else waits in line.
Losers:
- Import-dependent economies without military power. Egypt is already experiencing a double blow: rising prices for imported fuel and falling revenues from the Suez Canal. Inflation in Cairo has accelerated to double digits. According to the Energy Transitions Commission, the closure of Hormuz could increase global energy costs by $2 trillion annually.
- Tech giants. Google, Microsoft, Meta, and Amazon—operators of the Falcon and Gulf Bridge International submarine cable systems that pass through Iranian territorial waters. If Tehran follows through on its threat to introduce licensing and fees, the cost of maintaining these cables will rise by $120-150 million per year. Worse still, any "technical damage" to a cable by IRGC combat divers could trigger a "digital catastrophe" with losses of up to $100 million per day.
What the Media Isn't Saying
Non-obvious insight: The main game is not about oil, but about underwater fiber-optic infrastructure. Iranian officials and pro-government media have begun actively discussing plans to charge fees to international companies whose internet cables cross the Strait of Hormuz. According to TeleGeography, at least two major systems—Falcon and Gulf Bridge International—physically pass through Iranian territorial waters. They handle interbank clearing between Asia, Europe, and the Gulf states worth over $10 trillion daily. This means the IRGC gains leverage not over oil flows, but over the global financial system. No media outlet has asked: why was Zolfaghari's statement published simultaneously with the Fars News report on "Iran's sovereign rights over underwater cables"? The answer is simple: Tehran is building a two-tier escalation ladder. Tier 1—oil, visible to all. Tier 2—fiber optics, invisible to the general public but deadly dangerous for the banking system.
Forecast: Next 30 Days and 90 Days
30 days (by June 20, 2026):
Commercial oil reserves outside the Persian Gulf will reach minimum operating levels. As Exxon's CEO warned, after that "the main buffer will disappear." Brent will test the $130 per barrel mark. US-Iran negotiations will stall—the sides will not agree on reparations. China will continue to receive exclusive corridors for tanker passage, deepening the rift between the US and its allies.
90 days (by August 20, 2026):
Even if a truce is reached, Exxon warns that it will take 1-2 months between the strait's reopening and the normalization of supplies. This means the world will see a "second wave" of price shock not from scarcity, but from replenishing reserves. Governments will begin massively refilling storage tanks, and Brent will stay above $105 until the end of the year. Iran is unlikely to abandon its claims to control underwater cables—this will become a "sleeping" leverage tool for the future.
Editorial Forecast
Asset: Brent crude oil (futures)
Direction: Up in the next 24-72 hours
Target: Return to $115 per barrel after yesterday's pullback below $110, triggered by Trump's statement about postponing the strike. If news of new tanker passage disruptions emerges, test $118.
Confidence: Medium. The market is in headline-trading mode: any mention of negotiations pushes quotes down, any escalation pushes them sharply up.
Main risk: Trump announces the resumption of direct talks with Iran. This would trigger an instant Brent crash of $5-7 per barrel in a single session. This is the editorial team's opinion, not an investment recommendation.
— Editorial Team
