Iran's offensive shift threatens 20% of global oil supply

Iran has shifted from a defensive to a "fully offensive" military posture and set a multi-week deadline for Washington to implement the June memorandum of understanding, a senior Iranian official told Reuters on Monday.

Iran shifted to a "fully offensive" military posture and set a multi-week deadline for the US to implement the June memorandum, warning it will not tolerate an indefinite naval blockade of the Strait of Hormuz.

"Within the short period of a few weeks set by Iran, all the agreement's provisions must be implemented by the US," the senior Iranian official told Reuters. "This is a precondition for further negotiations with the US."

The warning comes as ship-tracking data shows Hormuz traffic has collapsed. Kpler recorded five commodity vessel transits on Saturday and none on Sunday, versus more than 130 per day before the US and Israel launched the war in late February. The strait carries roughly one-fifth of global crude oil and LNG shipments.

If diplomacy fails, Tehran would conduct a "timely and precise" military attack to break the blockade, the official said, warning that "all Iranian entities" are prepared to escalate tensions in the strait and wider region. That scenario would push crude prices sharply higher and trigger risk-off across global markets as the US approaches November midterm elections.

The June 17 memorandum established a 60-day timeframe, extendable by mutual consent, for both sides to reach a broader agreement covering Iran's nuclear program. Trump declared the agreement "over" on July 7, and Iran subsequently suspended it. Washington accuses Tehran of failing to reopen Hormuz; Tehran says the US never lifted restrictions on Iranian ports or released frozen assets as required.

US Secretary of War Pete Hegseth said last week the Navy can maintain the blockade "indefinitely" by rotating ships through the region. Treasury Secretary Scott Bessent has pledged additional measures to deepen Iran's economic isolation. Trump has described the naval operation as a "wall of steel" and claimed "total control" of the strait.

Hormuz traffic collapses to zero

The blockade has sharply curtailed Iran's ability to export oil, one of its most important sources of hard currency. Damage to energy infrastructure and additional sanctions have compounded the pressure. The decline in Hormuz traffic accelerated after the UAE reported attacks on three tankers operated by Abu Dhabi National Oil Company last week.

Iranian Foreign Minister Abbas Araghchi has said the strait will not reopen until Washington meets Tehran's conditions. He said discussions with Oman concern the technical creation of new shipping lanes because previous routes can no longer be used.

IRGC warns of strategic surprises

Brig. Gen. Yadollah Javani, political deputy of Iran's Islamic Revolutionary Guard Corps, told Fars News Agency that Iran's armed forces would adopt a more "offensive form" of defense. Javani said Supreme Leader Mojtaba Khamenei's recent appointments and directives reflect an effort to "reorganize, modernize, and make more effective" Iran's defense doctrine. "Perhaps they should expect strategic surprises," he added.

IRGC spokesperson Brig. Gen. Alimohammad Mohebbi dismissed Trump's claim of a backchannel with the IRGC as "delusions" born of "the illusions and nightmares stemming from defeat and desperation in the war." He said the US president has "only one real path ahead of him, and that is to accept defeat and implement the conditions Iran has set."

The last time Iran threatened to close Hormuz was in 2019 after US sanctions, when Brent crude spiked about 15 percent within two weeks before tensions eased. This time, the blockade is already in place, and the escalation risk is structural rather than rhetorical.

Israeli officials believe the economic pressure intended to constrain Iran could itself push Tehran toward escalation. If Tehran concludes the blockade threatens regime stability, it may seek to disrupt oil and gas supplies, drive up global energy prices, and increase domestic political pressure on Trump to end the conflict. Iran-backed groups have already increased pressure elsewhere, with the Houthis declaring a naval blockade on Saudi Arabia at the Bab el-Mandeb strait.

The central risk is that Iran's shift toward a "fully offensive" policy transforms the economic standoff over Hormuz into another major round of regional fighting, particularly if Tehran concludes diplomacy will not end the US blockade.

This article is for informational purposes only and does not constitute investment advice.