Piper Sandler Warns Market Skeptical of Trump-Iran Peace Deal, Strait of Hormuz May Remain Blocked

According to Piper Sandler's latest report on May 27, the market lacks confidence in a near-term U.S.-Iran peace agreement, with the Strait of Hormuz likely to remain largely closed in coming months and oil prices potentially hitting fresh highs. The institution believes the strait's shipping will struggle to recover to pre-conflict levels (50% capacity) in the coming weeks, as supply shortages continue to push energy prices higher.

Standard & Poor's Global Energy President Dave Ernsberger echoed the concern, stating that the market is currently "afraid to establish crude positions" due to extreme uncertainty surrounding negotiations, strait reopening timelines, and potential toll mechanisms. Market participants also worry Iran may impose transit fees on tankers, further complicating recovery prospects.