Piper Sandler says Strait of Hormuz to remain closed for months and oil to hit new highs
Piper Sandler anticipates that the Strait of Hormuz will remain largely closed for several months, a situation that could lead to new highs for oil prices. The investment bank's outlook suggests that global oil markets may face increasing supply pressures.
The firm projects that the prolonged closure of the critical shipping lane will exacerbate existing shortages, driving crude oil benchmarks higher. This forecast comes as traders monitor developments in US-Iran talks, which have recently contributed to a pullback in oil prices.
"We think the Strait of Hormuz remains largely closed for months yet, meaning shortages become more urgent and oil hits new highs this summer,” Piper Sandler stated, according to TipRanks. The firm, identified by its ticker PIPR, expects these new highs to materialize during the summer period.
Currently, oil prices have seen a pullback as market participants look for progress in discussions between the United States and Iran, MSN reported. Despite this recent market movement, Piper Sandler's analysis points to a future scenario of elevated oil prices driven by supply constraints related to the Strait of Hormuz.