Rapidan sees Strait of Hormuz closed through 2027, tightening oil supply
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Energy analysts at Rapidan Energy Group forecast that the Strait of Hormuz will remain effectively closed to free navigation through late 2027, one year longer than previously expected. The firm said disruptions will be deeper and more persistent, materially tightening global oil balances. The revised outlook comes as hopes for a quick resolution to the U.S.-Iran conflict fade after a ceasefire collapse.
Revised Timeline
Rapidan Energy Group now expects military risks to constrain vessel transits through the Strait of Hormuz well into 2027, keeping Arab Gulf production below pre-conflict levels through the fourth quarter of 2027. The firm said it can no longer assume a near-term return to freedom of navigation. This marks a one-year extension from its previous forecast, reflecting the failure of a temporary ceasefire and a return to open hostilities between the U.S. and Iran.
Market Implications
Rapidan plans to update its global inventory forecasts in an upcoming July oil market report, indicating that its crude balance now shows inventory draws through year-end, which it described as bullish for crude prices. The firm's CEO Bob McNally has outlined scenarios where the U.S. and allies focus on degrading Iran's ability to disrupt traffic to allow military-escorted transits. The prolonged closure is expected to keep oil prices elevated, affecting consumers and global supply chains.
What's Next
Rapidan is set to release its updated oil market report in July, which will include revised inventory forecasts. It remains unclear whether U.S. military efforts to secure the strait will succeed in reducing disruptions to a manageable level before 2028.
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Rapidan sees Strait of Hormuz closed through 2027, tightening oil supply
