Piper Sandler warns Hormuz closure could last months

Piper Sandler says the Strait of Hormuz will likely remain largely closed for months, making shortages more urgent and pushing oil to new highs this summer—after recent U.S. strikes in southern Iran and renewed talk of an Iran deal.

For months, the Strait of Hormuz has moved from a shipping shortcut to a choke point that feels harder to reopen than anyone wants to admit.

Piper Sandler’s energy and macro teams are telling clients they are not buying the optimism that an Iran deal is nearing. In a recent note. the bank said it expects the Strait of Hormuz to remain largely closed for months. adding that shortages would become more urgent—and that oil could hit new highs this summer.

The warning landed as oil markets tried to read mixed signals over the long weekend. West Texas Intermediate futures were down since Friday but bounced back some on Tuesday, after the U.S. military described “self-defense strikes” in southern Iran. Those strikes. according to the military. included targeting Iranian missile launch sites and vessels placing mines around the Strait of Hormuz.

The strikes came after President Donald Trump said Saturday that an agreement with Iran has been “largely negotiated,” with details to be announced shortly. Iran’s foreign ministry, for its part, has said navigation through the vital shipping channel “will have costs.”

Piper Sandler’s take is blunt: it has very little confidence that commercial traffic through the Strait would return to even 50% of its pre-crisis levels. either next week or next month. The bank also argues the U.S. has been “unwilling to press the fight. ” because the scale of Iran’s retaliation could have broader implications for its neighbors and may further disrupt global supply chains.

Underpinning the bank’s outlook is a belief that Iran’s leaders are unwilling to settle for compromise. Piper Sandler links that to the idea that Iran believes it has leverage—an assumption that, in the bank’s view, reinforces the risk that the Strait closure could last.

That matters far beyond shipping schedules. Various economies in the Middle East, Asia and Europe rely heavily on shipment through the Strait. The passage is particularly important for oil and LNG exports from the Middle East to Asia. When the route has been disrupted, the ripple effect lands in prices and policy discussions across multiple continents.

The stakes have already shown up in the data. The narrow passage that once carried about one-fifth of the world’s seaborne oil has seen historic dips, with tracking data showing vessel traffic falling sharply to near zero since the war escalated.

Oil itself has been whipsawed by the conflict’s early shocks and the market’s attempt to price what comes next. WTI crude futures neared $120 a barrel during the onset of the conflict, but were last trading around $94 a barrel. Piper Sandler’s call for a new high—if it comes to pass—would send a fresh jolt through the global economy. and it could undercut the stock market rebound that has taken hold as oil traded off its war-time peak.

Even with talk of a negotiated Iran deal. the competing realities on the waterway are hard to ignore: the U.S. military has described strikes around missile sites and mine-laying vessels. Iran has warned that navigation “will have costs. ” and Piper Sandler is telling clients that the Strait’s return to normal may not come quickly—if at all.

Piper Sandler Strait of Hormuz Iran deal oil prices WTI West Texas Intermediate shipping traffic LNG exports U.S. military strikes missile launch sites mine-laying vessels