Iran Halts Compliance With the U.S.-Iran Memorandum, Escalation of Conflict Again

The ink at the negotiating table wasn’t even dry before bombs were already on the way
🔗 The Chain of Events
The U.S.-Iran understanding memorandum signed last month is now voided on both sides. On July 18, Iran’s deputy foreign minister said the U.S. violated its commitments first, so Iran stopped fulfilling
The wording from the Supreme Leader was even more direct: “Trump’s signature is worthless.” Trump’s response was that he doesn’t care at all
There are no signs of cooling on the military front. The U.S. Central Command announced that starting at 6:00 a.m. Beijing time on July 19, it would launch a new round of airstrikes against Iran. The targets are meant to weaken Iran’s ability to threaten commercial shipping through the Strait of Hormuz, and to respond to the previous day’s action by Iran’s Islamic Revolutionary Guard Corps against U.S. forces stationed in Jordan
Diplomacy is dead, and the shots ring out
The Strait of Hormuz Is the Biggest Variable
This is the choke point for global oil transport. About 20% of the world’s oil supply passes through this waterway each day. One of the official reasons for the U.S. airstrikes is to protect commercial shipping here, but the airstrikes themselves end up increasing the risk premium for this waterway
Iran has repeatedly threatened to blockade the Strait of Hormuz in history, and each round of messaging causes oil prices to swing sharply in the short term. This time, the escalation has reached the point where the memorandum is voided and both sides start slapping each other in the face. The probability that the blockade threat turns from words into action is rising, but it’s still a different order of magnitude from an actual blockade
Market impact
Crude oil is the asset directly affected, and the geopolitical premium will be repriced in the short term. U.S. energy stocks may benefit, but the overall contraction in risk appetite will weigh on tech and growth stocks
For the crypto market, this is a double-edged sword. As risk-off sentiment heats up, it typically first flows into gold and U.S. Treasuries, but if the situation further spirals and boosts inflation expectations, the anti-inflation narrative around BTC will also emerge. In the short run, the more likely direction is to follow the overall slide in risk assets, rather than independently strengthening
I think the breaking of the memorandum isn’t the end—it’s a reshuffling of negotiation chips. When Trump said “doesn’t care at all,” that’s negotiation language, not a real abandonment of diplomacy. But at this stage, both sides need to play even tougher cards first before they can sit back down at the table
The risk is misjudgment. Airstrike escalation, Iran’s moves in the Strait of Hormuz, and the U.S. further upping the ante—each step has the possibility of pushing the situation toward a point of no return. Markets hate uncertainty, and the developments this weekend are worth closely watching
DYOR Not investment advice