Piper Sandler Warns Strait of Hormuz May Stay Closed for Months, Oil to Hit New Records

Piper Sandler warned on May 26 that the Strait of Hormuz could remain largely shut for months, dismissing market optimism over a U.S.-Iran deal and forecasting oil prices will spike to fresh highs this summer. The investment bank’s energy research team said the supply shortfall will become more acute. West Texas Intermediate crude traded near $94 a barrel on May 26, after briefly touching $120 during early fighting. Vessel tracking data shows commercial traffic through the strait—which normally carries about one-fifth of global seaborne oil—has plunged to near zero. U.S. forces conducted defensive strikes on Iranian missile sites and mine-laying vessels, while Iran’s foreign ministry said passage “will come at a cost.” Piper Sandler gave almost no chance of flows recovering to even 50% of pre-crisis levels in the coming weeks or months. The bank said Washington is reluctant to expand the conflict, fearing broader regional retaliation and supply-chain disruption. The strait is critical for Middle East oil and LNG exports to Asia and Europe. A sustained closure risks upending the equity rally fueled by oil’s recent retreat from highs.