Piper Sandler says Strait of Hormuz to remain closed for months and oil to hit new highs

Piper Sandler isn't buying the talk that an Iran deal is nearing, telling clients that the Strait of Hormuz will largely stay closed and oil will hit new highs. "We think the Strait of Hormuz remains largely closed for months yet, meaning shortages become more urgent and oil hits new highs this Summer," according to a recent note from the investment bank's energy and macro teams. West Texas Intermediate Futures are down since Friday but bounced back some on Tuesday with mixed messaging on a possible Iran deal over the long weekend. The U.S. military said it conducted " self-defense strikes " in southern Iran, which included targeting Iranian missile launch sites and vessels placing mines around the Strait of Hormuz. The news came after President Donald Trump said Saturday that an agreement with Iran has been " largely negotiated ", with details to be announced shortly. Meanwhile, Iran's foreign ministry has said navigation through the vital shipping channel "will have costs ." Piper Sandler said it has very little confidence that the commercial traffic through the Strait would return to even 50% of its pre-crisis levels, either next week or next month. 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, the note said. …