Strait of Hormuz Reopens: Oil Prices Fall Below $70, but Why Hasn't the Macroeconomic Environment Eased?

In mid-June 2026, the United States and Iran signed a temporary ceasefire memorandum of understanding, pledging to restart navigation through the Strait of Hormuz and lift some sanctions on Iran’s oil exports. International oil prices promptly fell—on June 14, Brent crude dropped from above $118 during the conflict to $83.27; on June 24, WTI crude closed at $70.34 and briefly broke below the $70 level intraday; on June 26, WTI was at $70.02 and Brent was at $73.52.

At face value, the fall in oil prices amounts to a kind of “easing”—energy costs decline, inflation pressure eases, and valuation pressure on risk assets lightens. But this judgment must pass three tests: Has the Strait of Hormuz truly returned to pre-conflict levels? Have expectations for Federal Reserve rate hikes changed due to the drop in oil prices? Have macro liquidity conditions improved materially? From three dimensions—geopolitical reality constraints, the independent logic of monetary policy, and the transmission mechanism into the crypto market—this article breaks down why the “illusion of easing” may be nothing more than a stage-based narrative.

Ceasefire Reached, but “Recovery” of Hormuz Is Not the Same as “Opening”

From June 14 to 15, the U.S. and Iran confirmed that a temporary agreement had been reached, and the Strait of Hormuz was expected to reopen soon. The agreement includes 14 points, covering the opening of the shipping lane, the unfreezing of assets, and non-proliferation commitments. The two sides agreed to begin 60 days of negotiations on a final agreement. According to the memorandum, navigation through the strait must be restored to full operating capacity within 30 days.

As of June 26, about 10 days have passed since the agreement was signed. Navigation data has indeed improved—on June 25, a report from the energy company S&P Global Energy showed that in the month to date, 551 ships passed through the Strait of Hormuz, and average daily traffic had recovered to about 57% of pre-conflict levels. On June 24, 78 ships passed in a single day, the highest record since the outbreak of the Iran war.

But there is a substantial gap between 57% and 100%. More importantly, the recovery in traffic reflects to a significant extent the departure of ships that had been stuck in the Persian Gulf earlier, rather than a sustained influx of new capacity. Data on June 26 showed Brent crude futures down $1.47 to $73.79 and WTI down $1.44 to $70.48. Prices are still searching for a bottom, indicating that the market has not yet formed stable expectations about the speed and scale of supply recovery.

Shipping industry caution is another constraining variable. Mitsui OSK Lines, the world’s largest tanker company, said that until shipowners are confident the agreement is “implemented,” they will not resume transiting the Strait of Hormuz for weeks. Major companies such as Nippon Yusen also stated they would temporarily hold off on restarting routes. Shipowners’ caution is not excessive—on June 25, a cargo ship was attacked near Oman, and U.S. officials alleged that Iran launched missiles. The ceasefire is fragile, shipping recovery is gradual, and supply return lags. These three “yes” together form a structural support that prevents oil prices from falling much further in the short term.

In its June monthly report, the International Energy Agency judged that even if the agreement is successfully implemented and the strait reopens, this year’s supply crisis could turn into a significant supply surplus by 2027. The IEA expects global oil supply in 2027 to surge by 8 million barrels per day, while demand would rise by only 2 million barrels per day. This means “easing” is possible in the medium term, but only if the agreement can survive the 60-day negotiation window and be transformed into institutional arrangements. However, due to the severe lack of trust between the U.S. and Iran, it is “very difficult” to turn a temporary ceasefire into a long-term arrangement.

Oil Prices Fell, but Rate-Hike Expectations in the Fed Did Not Change

A fall in oil prices is usually understood as a signal that inflation pressure is easing, which then leads to expectations that central banks will loosen. But this logic faces significant resistance in the macro environment of June 2026.

The U.S. May PCE inflation data came in above expectations, with core PCE at 3.4%, the highest in three years. Market probabilities for a September rate hike rose to 48%, and investment banks predicted that there could be two rate hikes within the year. At the Fed’s June policy meeting, the benchmark interest rate was kept unchanged, but nearly half of policymakers said they expect rate hikes to occur this year—this stance contrasts sharply with three months earlier, when “no one thought a rate hike was needed.”

The drop in oil prices did not change this policy path, because the drivers of this round of inflation are no longer limited to energy prices. The rise in core PCE reflects stickiness in services prices, wage growth, and housing costs—factors that are much less sensitive to oil prices than the energy component. The Fed is focused on the persistence of core inflation, not the short-term fluctuations in crude oil prices. As long as core PCE stays above 3%, expectations for rate hikes are hard to offset by the fall in oil prices.

The U.S. Dollar Index rose to 101.611 on June 24, reaching a 13-month high. Rising rate-hike expectations, together with sell-offs in tech stocks, provided support for the dollar. A strong dollar itself weighs on risk assets—crypto assets are priced in dollars, and a stronger dollar means higher holding costs and weaker incremental buy pressure.

Therefore, falling oil prices and rising rate-hike expectations can coexist in June 2026. The former results from the fading of the geopolitical risk premium; the latter is a product of stickier core inflation and the Fed’s policy framework. Simply interpreting the two as a linear chain of “oil prices down → inflation down → Fed easing → risk assets up” ignores the multidimensional nature of monetary policy decision-making.

The Real Situation in Crypto: Multiple Negative Factors Converging, Not Improvement from a Single Variable

On June 26, 2026, Bitcoin was quoted at about $59,592, down more than 52% from its all-time high of $126,223 in October 2025. Ethereum also fell to around $1,560, down nearly 5% over the past 24 hours. The Fear & Greed Index dropped to 18, placing it deep in an extreme fear range. The total liquidation amount across the entire network in 24 hours reached $891 million, with long liquidations accounting for $800 million.

This price level is not caused by isolated geopolitical shock events; rather, it is the combined result of multiple structural bearish factors.

The first is inflation and rate-hike expectations. Core PCE beating expectations keeps the high-interest-rate environment persistently weighing on non-yielding crypto assets. As long as real interest rates remain positive, Bitcoin’s cost of holding is difficult to be covered by an inflation-hedge narrative.

The second is linkage with U.S. stocks. The Nasdaq suffered a four-day losing streak, and the correlation between Bitcoin and the Nasdaq reached as high as 0.94. Capital leaving technology stocks directly transmits to the crypto market—both share the same pool of risk-on capital. On June 24, the Nasdaq closed down 0.43% to 25,476.64, and the S&P 500 fell 0.1% to 7,358.22.

The third is ongoing withdrawals of institutional capital. Bitcoin spot ETFs saw net outflows for multiple consecutive days, and MSTR’s stock price plunged 9.44%. MicroStrategy was once one of the most important institutional long signals in the crypto market; its stock collapse implies a loosening of the leveraged long structure.

The fourth is technical pressure from options expiration. On June 26, large BTC options concentratedly expired. On-exchange longs actively closed positions to deleverage, which led to frequent wick intraday and a sharp amplification of volatility.

Falling oil prices are not a direct positive for the crypto market; they work through an indirect chain: “inflation expectations → interest rate expectations → risk-asset valuations.” As for the current state of this chain: oil prices have fallen, but core inflation has not declined, rate-hike expectations have not changed, U.S. stocks have not stopped falling, and institutions have not returned. The macro conditions facing the crypto market have not improved materially due to the drop in oil prices.

From Oil Prices to Crypto Assets: A Structural Review of the Transmission Mechanism

Is there a stable correlation between oil prices and crypto assets? Historical data does not support a simple linear conclusion.

During the energy-driven cross-asset sell-off in March 2026, Bitcoin briefly fell to the mid-$60,000 range. During the conflict period, oil prices spiked and crypto assets fell at the same time, showing a positive correlation under the framework of “risk asset sell-off”—both decline in the same direction, rather than a seesaw effect. In a May report, the World Bank warned that higher oil prices could suppress the crypto market in 2026, and that each 1% reduction in supply caused by geopolitical tensions could raise oil prices by 11.5%. High oil prices push up inflation and interest rates, compressing the performance of both stocks and crypto assets.

But does a drop in oil prices mean the reverse mechanism goes into effect? The answer is not clear. Research by the IMF indicates that the impact of geopolitical conflicts on digital assets is reflected more in “how macro shocks transmit to the crypto market through financial conditions and cross-border capital flows.” In other words, the key variable is not oil prices themselves, but the monetary policy reactions and changes in risk appetite triggered by changes in oil prices.

The core contradiction right now is that the fall in oil prices has not triggered a monetary policy easing response. As long as the Fed’s rate-hike expectations remain intact, the revaluation of risk-asset valuations will not end. What the crypto market experienced in June 2026 was not a single oil price shock, but a triple overlap of liquidity contraction, declining risk appetite, and institutional deleveraging.

Conclusion

The Iran ceasefire agreement drove oil prices to fall below $70, which superficially forms an “easing” signal. But the 57% recovery rate of Strait of Hormuz navigation, continued shipping industry caution, and uncertainty around the 60-day negotiation window together create real supply-side constraints. Meanwhile, stickiness in core PCE keeps the Fed’s rate-hike expectations from loosening due to the fall in oil prices; the strong dollar and weakness in U.S. stocks continue to suppress risk-asset valuations.

Bitcoin falling below $59,000 and Ethereum dropping to $1,560 are the result of multiple bearish factors converging across the macro, liquidity, and technical dimensions—not a function of a single geopolitical variable. The “illusion of easing” is an illusion because true easing—whether it is an actual, substantive recovery on the supply side or a directional shift in monetary policy—has not occurred yet.

For participants in the crypto market, the focus may not be on intraday fluctuations in oil prices, but on three more decisive variables: whether the Strait of Hormuz can achieve sustained, safe full-capacity navigation within the 60-day negotiation window; whether core PCE shows a trend decline, thereby changing the Fed’s policy path; and whether the U.S. tech sector stabilizes, thereby repairing expectations for capital inflows into risk assets. Until these variables provide a clear direction, “easing” is closer to an unfulfilled expectation than to a reality already in place.

FAQ

Q: After the Iran ceasefire agreement was signed, why didn’t oil prices fall back to pre-conflict levels?

Navigation through the Strait of Hormuz has only recovered to about 57% of pre-conflict levels, far from full-capacity operations. Shipping companies are standing by due to security concerns and high insurance costs. In addition, the agreement is only a temporary 60-day arrangement, and core disputes such as Iran’s nuclear issue have not been resolved. The market is pricing “partial recovery,” not “full normalization.”

Q: Why didn’t the fall in oil prices drive a Bitcoin rebound?

Bitcoin is currently suppressed by multiple macro bearish factors: core PCE at 3.4%—the highest in three years—raising rate-hike expectations; the Nasdaq falling for four consecutive days, with BTC-Nasdaq correlation as high as 0.94; spot ETFs continuing net outflows, and institutions reducing positions. The fall in oil prices has not changed the Fed’s policy path, and the revaluation of risk-asset valuations is still ongoing.

Q: How long will it take for the Strait of Hormuz to fully restore navigation?

The memorandum requires restoration to full operating capacity within 30 days. But industry observers believe shipowners need solid evidence that the agreement is “implemented,” and actual restoration may take weeks or even longer. Security risks, mine threats, and transit fee issues remain obstacles. As of June 26, average daily navigation volume has only recovered to 57% of pre-conflict levels.

Q: Under what conditions might the Fed change its rate-hike stance?

The Fed is focused on the persistence of core inflation, not short-term fluctuations in crude oil prices. As long as core PCE remains elevated and services prices and wage growth remain sticky, rate-hike expectations are hard to reverse. Falling oil prices would need to persist long enough and transmit into core inflation components to potentially affect the Fed’s policy path.

Q: Where is the current bottom in the crypto market?

Bitcoin’s key support is in the $58,400–$59,000 range. If that support breaks, the next target points to $55,000, or even $50,000. Ethereum’s lifeline support is at $1,530; if it breaks, look to $1,500. The market is currently in a bearish structure, with rebounds lacking volume, and the medium-term trend has not yet reversed.