Piper Sandler Sees Months-Long Hormuz Closure as WTI Threatens New Highs Above $120
Updated
Updated · CNBC · May 26
Piper Sandler Sees Months-Long Hormuz Closure as WTI Threatens New Highs Above $120
1 articles · Updated · CNBC · May 26
Piper Sandler told clients the Strait of Hormuz is likely to remain largely closed for months, a scenario it says would drive oil to fresh summer highs after WTI recently neared $120 a barrel.
The bank said Iran sees little reason to compromise and the U.S. is unwilling to press the fight because broader retaliation could hit neighbors and global supply chains.
Commercial shipping is unlikely to recover even to 50% of pre-crisis levels next week or next month, Piper said, after vessel traffic through the chokepoint fell sharply to near zero as the war escalated.
Mixed signals have kept crude volatile: Trump said an Iran agreement was largely negotiated, but Iran warned passage through the waterway would carry costs and the U.S. said it struck missile sites and mine-laying vessels.
The strait once carried about one-fifth of the world's seaborne oil, so a prolonged disruption would pressure Middle Eastern, Asian and European economies and threaten the recent stock-market rebound.
Can new energy pipelines permanently neutralize the strategic threat of the Strait of Hormuz?
Is Iran's bid for control of the Hormuz Strait a desperate gamble or a strategic masterstroke?
With peace talks and military strikes happening simultaneously, what is the true US-Iran endgame?
The 2026 Strait of Hormuz Blockade: How a Single Chokepoint Triggered a Worldwide Energy and Supply Chain Crisis
Overview
The global crisis began with a targeted attack by the United States and Israel that killed Iran’s supreme leader and top officials. In retaliation, Iran closed the Strait of Hormuz, threatening attacks on ships and immediately halting oil shipments. This action caused a sudden and severe shock to global energy markets, as oil flow from the Persian Gulf stopped and prices surged worldwide. The International Energy Agency responded by releasing oil from reserves, but the disruption highlighted the world’s heavy reliance on this critical chokepoint and triggered widespread economic and supply chain turmoil.