Iran Announces "Selective Passage" in Strait of Hormuz, Bessent Declares War: Trading 50 Days of US Price Increases for 50 Years of Middle East Peace

Iran’s Ministry of Foreign Affairs officially states that the Strait of Hormuz is not blocked, but ships belonging to the U.S., Israel, and invading countries will be intercepted according to law; on the same day, U.S. Treasury Secretary Yellen said that the brief price surge is the price paid for long-term peace in the Middle East, with oil prices soaring over 40% and driving a global inflation outlook upgrade, causing Bitcoin to fall below $72,000 and over $540 million in liquidation across the network in 24 hours.
(Background: Two Indian oil tankers have passed through the Strait of Hormuz; Iran’s Foreign Minister: only U.S. and Israeli ships will be blocked)
(Additional context: Is Iran’s blockade of the Strait of Hormuz just a show? Experts: Tehran will bleed first, market impact and economic chain reactions analyzed)

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• The strait remains open, but not for everyone
• Oil prices hit a peak, inflation expectations fully revised upward
• Crypto market: longs bear the brunt
• Who will pay for the “50 years of peace”?

The situation in the Strait of Hormuz took a key turn on March 22: Iran’s official statement clarified that there is no “full blockade,” but a set of “selective passage” rules—ships belonging to the U.S., Israel, and other invading countries will be intercepted according to law; other non-hostile ships can still pass if they follow Iran’s announced safety regulations and coordinate in advance.

On the same day, U.S. Treasury Secretary Yellen made an arithmetic statement in an NBC interview: “50 days of temporary price increases in exchange for 50 years of peace in the Middle East—a non-nuclear Iran regime.” When asked if this meant prices would fall back after 50 days, Yellen quickly added, “I’m just giving an example, it could be 30 days, 100 days, I don’t know the exact time.”

This dialogue clearly reflects the current U.S. government policy logic: framing the current inflation pain as a “strategic investment” rather than a policy mistake.

The strait remains open, but not for everyone

The core of Iran’s Foreign Ministry declaration is to draw a third path between “full blockade” and “complete openness.”

The declaration emphasizes that the strait “has not been blocked,” with two Indian oil tankers carrying over 90,000 tons of liquefied petroleum gas successfully passing through. Indian officials also confirmed this. However, the declaration explicitly excludes ships that do not meet “non-hostile passage” conditions, specifically naming the U.S. and Israel, and including “other participating invading countries.”

This set of rules effectively replaces commercial standards with political stance, reshaping the passage order of the world’s top oil route. About 20 million barrels of oil pass through the Strait of Hormuz daily, accounting for one-fifth of global oil supply; even without a blockade, the threat of “selective interception” alone is enough to significantly increase insurance premiums and shipping costs for oil tankers.

Oil prices hit a peak, inflation expectations fully revised upward

Markets have already priced in this uncertainty. Since the conflict erupted, Brent crude has surged over 40%, breaking $105 per barrel; U.S. domestic gasoline prices have risen nearly $1 per gallon since the war began, directly impacting consumers’ wallets.

The Federal Reserve’s response is also clear: the latest dot plot raised the 2026 PCE inflation forecast from 2.4% to 2.7%, explicitly citing the Hormuz Strait oil shock as a direct driver. Regarding interest rate paths, the median of the dot plot maintains only one 25 basis point rate cut in 2023, more conservative than market expectations.

Yellen’s “50-day” logic contrasts with the Fed’s assessment: the Treasury Department tends to frame inflation as a “geopolitical dividend,” while the Fed has actually revised its full-year forecast upward and has not signaled an accelerated rate cut.

Crypto market: longs bear the brunt

Risk assets are under pressure from both geopolitical and inflation shocks. Bitcoin dropped to about $71,313, down 4.62%; Ethereum fell to $2,201, down 5.92%. In 24 hours, total liquidation reached $542 million, with longs liquidated at $448 million, over 80%, indicating the market had accumulated many long positions that were quickly liquidated amid escalating conflict news.

Meanwhile, Yellen announced a temporary lifting of sanctions on loaded Iranian and Russian oil ships, attempting to provide short-term market relief. However, whether this measure can effectively lower oil prices remains uncertain.

Who will pay for the “50 years of peace”

Yellen’s arithmetic is based on an unstated premise: that the Iranian regime will yield or weaken in the short term, allowing inflation to fall in the foreseeable future. But Iran’s Foreign Ministry’s declaration shows that Tehran’s current strategy is “not fully blockade, selective interception, setting conditions”—a prolonged attrition stance rather than imminent collapse.

For the crypto market, short-term risk aversion dominates selling, but if the conflict prolongs and the Fed continues to lower rate hike expectations, the timing for funds to re-enter inflation hedges will be delayed. Analysts like Arthur Hayes have pointed out that the real Bitcoin buy point may only come after the Fed is forced to turn to money printing—and that moment may not be within “50 days.”