world-economy

Piper Sandler: Hormuz Closure to Extend Months, Oil Prices to Rise

Investment bank Piper Sandler forecasts the Strait of Hormuz will remain largely closed for months, with crude prices climbing to new highs this summer. Commercial traffic is expected to plummet significantly.

The energy team expressed minimal confidence that transit through the Strait will recover to even 50% of pre-crisis levels in coming weeks or months. Recent military self-defense strikes targeted Iranian missile launch sites and vessels placing mines around the Strait, intensifying disruption concerns.

While diplomatic negotiations continue, Iranian leadership believes it maintains negotiating leverage and remains unwilling to accept compromises, the bank said. Tehran has warned that navigation through the Strait "will have costs."

West Texas Intermediate futures showed volatility following conflicting statements about potential agreements, closing mixed Tuesday after weekend declines. The Strait handles critical Middle East oil and liquefied natural gas exports bound for Asia, Europe and other regions.