WASHINGTON -- Cryptocurrency markets surged and oil traders recalibrated after signals that the Strait of Hormuz is reopening, even as military tensions and policy contradictions persist.
While equities have been slower to react, analysts say the divergence reflects how different parts of the global financial system process risk and liquidity.
Ryan Kirkley, CEO of blockchain payments company Global Settlement Network
In an interview with RFE/RL on April 17, Ryan Kirkley, CEO of blockchain payments company Global Settlement Network, explains the worldwide economic importance of the Strait of Hormuz, why markets are moving at varying paces, and why oil prices may already be turning.
RFE/RL: Let's start simple. Why is the Strait of Hormuz so critical to the global market?
Ryan Kirkley: We see roughly 20 percent of all oil and nearly 30 percent of petroleum products flow through the Strait of Hormuz. Even a small disruption breaks global supply chains, from pharmaceuticals to agriculture to jet fuel to the energy that powers grids around the world.
The moment that flow is interrupted, we begin to see countries falter, economies weaken, and entire industries come under rapid stress. Realistically, the Strait of Hormuz touches nearly every part of the global economy.
RFE/RL: One industry that responded quickly to the latest developments is crypto. Why is Bitcoin suddenly part of this conversation?
Kirkley: Bitcoin was always part of this conversation with Iran. What many people don't realize is that Iran accounts for a significant share of global Bitcoin mining.
During the conflict, we saw mining difficulty -- essentially the cost of producing Bitcoin -- drop sharply as energy infrastructure was disrupted. Now, with a cease-fire and some restoration of energy grids, that has rebounded, along with price activity.
Bitcoin has effectively become a driver within Iran's economy and has been used consistently in trade settlements with countries like Russia and China. So while it may seem sudden, this role has been developing for years.
RFE/RL: The White House says the strait is open, but the US Navy remains in place, and Iran insists traffic must pass through its controlled corridor. How should we interpret these mixed signals?
Kirkley: This may be the first time we can say the strait is functionally open. We've seen strong statements before, but now we're actually seeing ships move. There's a degree of trust forming on both sides under the cease-fire.
I've been monitoring ship traffic, and for the first time we're seeing close to 100 transponders entering that critical passage. Previously, we saw maybe three to five per hour at most before vessels turned around. So there is a real opportunity for de-escalation today.
That said, markets appear to be ignoring the conflict's impact. Jet fuel shortages, canceled flights, rising agricultural prices, and shipping costs up 30 percent -- these are real effects. Yet stock markets have barely reacted.
There's a disconnect: Financial markets are operating in a kind of speculative bubble, while everyday consumers -- particularly in the US and across Europe -- are already feeling the strain through higher fuel costs and inflation.
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Trump Says US-Iran Deal 'Very Close' After Tehran Declares Strait Of Hormuz OpenRFE/RL: Iran has reportedly considered charging tolls -- potentially in Bitcoin -- for ships passing through. How would that even work in practice?
Kirkley: This isn't new for Iran. The country has accepted crypto payments for sanctioned oil for years. In practice, these transactions are relatively simple. A wallet is created, funds are sent -- whether in Bitcoin, stablecoins, or other cryptocurrencies -- and transferred to another wallet under Iranian control.
Because these networks are decentralized, there's no central authority that can block the transaction. While wallets can be traced, enforcement depends on cooperation from jurisdictions like Russia or China, which often do not participate in Western compliance frameworks.
If tolling begins at scale, it could significantly change how oil is settled globally. The US being unable to maintain full control of the strait challenges the petrodollar system. Tokenized oil trading combined with instant crypto settlement becomes an attractive alternative.
That said, much of this activity would likely still rely on US dollar–backed stablecoins, since global oil pricing remains dollar-based.
RFE/RL: As payments move across banks, crypto networks, and alternative systems, what happens to trust and verification between parties?
Kirkley: It can either improve dramatically or deteriorate; it depends on how systems are implemented. The oil trading industry already relies heavily on trust because there's a lot of fraud and unreliable documentation.
As transactions move away from Western banking systems, the question becomes: Where does trust come from? Do you trust Russian or Chinese banking systems? Many don't.
What we're seeing now is the emergence of decentralized identity systems. These can replicate compliance standards like SWIFT or IMF requirements but in a blockchain-based format. They verify that participants are legitimate and authorized, including proof of funds and credentials. There's a gap in trust today, but properly implemented blockchain systems could ultimately improve it.
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What To Know About The US Naval Blockade Of IranRFE/RL: Bigger picture question: When you look back to the past six to seven weeks, is the financial system prepared for this kind of fragmentation or are we watching a real-time stress test?
Kirkley: We're absolutely seeing a real-time stress test. Timing has helped; this happened as winter ended in the Northern Hemisphere, during a slower travel period and before peak summer demand. That has softened the immediate blow.
But if the conflict continues for another one to two months, we could see severe consequences. What is now a stress test could escalate into broader economic instability, even collapse in some regions.
RFE/RL: What's your near-term outlook for oil prices?
Kirkley: I expect prices to start coming down today, assuming the cease-fire holds in a meaningful way. However, there's a backlog: Tankers and storage facilities are full, and production won't restart immediately. We're looking at a 30- to 90-day lag before production resumes, and possibly three to six months for a full recovery.
That said, global reserves could help stabilize things. If markets gain confidence that the conflict is over, countries like the US, Japan, and those in Europe may release reserves. That could help bring prices down at the consumer level more quickly.
RFE/RL: What should US businesses and investors watch most closely in the coming weeks?
Kirkley: The truce, plain and simple. Is this a real de-escalation, or just a temporary pause? That's the key variable.
There's still rhetoric about potential escalation, including possible troop movements. Even if that's part of negotiation strategy, it creates uncertainty for investors. Once there's clarity on Iran, whether the situation stabilizes or deteriorates, markets will begin to settle and regain a longer-term perspective.
RFE/RL: US President Donald Trump said Iran has agreed it will "never close the Strait of Hormuz again." How significant is that?
Kirkley: There's often a gap between public statements and reality on the ground. For decades, US officials have said Iran has the capability to close the strait -- and functionally, we've just seen that they can.
At the same time, Iran also feels the consequences. Blocking the strait harms its own economy, about half of which depends on exports. So unless there's a major escalation, it's unlikely Iran is incentivized to fully close it again. Doing so would risk mutual economic damage on a global scale.