Amos Hochstein, former senior energy advisor to President Biden, characterized the U.S.-Iran standoff Tuesday, May 12, 2026, as a “frozen conflict” that will keep oil prices elevated for the foreseeable future. Speaking on CNBC’s “Squawk Box,” Hochstein said: “We’re in a stalemate, a frozen conflict. In the meantime, the straits are closed so we’re in a no war, no oil, no straits condition.”
Hochstein’s framing matters because it comes from a senior practitioner who handled Middle East energy diplomacy through the previous administration. His core forecast: oil prices will likely remain in a $90-100 per barrel range through the rest of 2026 and into 2027 even if the Strait of Hormuz reopens in early June. The implication is that even a successful diplomatic resolution would not produce a near-term return to pre-conflict pricing — the structural damage and supply chain reconfiguration are too significant.
The “no war, no oil, no straits” formulation captures the paradox of the current moment. There is no active hot war between U.S. and Iranian forces. There are no significant oil flows from the Persian Gulf to global markets through the strait. There is no functioning shipping corridor. And yet there is also no formal escalation of hostilities and no formal closure of the strait by Iran — only practical impossibility for most commercial vessels. The conflict has settled into a steady-state disruption that markets must price as durable rather than transient.
Hochstein expects no breakthrough this week. With Trump scheduled to head to Beijing for talks with President Xi Jinping, the U.S. diplomatic apparatus is focused on whether China can apply useful pressure on Tehran. Hochstein said the conflict is now better understood as a multi-party problem requiring Chinese, Pakistani, and Qatari mediation in addition to the bilateral U.S.-Iran channel. The structure of negotiations has therefore become more complex, not simpler, even as the underlying terms have not changed.
The Hochstein framework aligns with Wall Street’s firming bearish view of any near-term resolution. Saudi Aramco CEO Amin Nasser warned Monday that the oil market will take until 2027 to normalize if Hormuz remains blocked beyond mid-June. Citi has kept risks tilted to the upside on its base case. Goldman Sachs has held its Q4 2026 Brent forecast at $90. Barclays sees Brent at $100. The forecaster consensus has shifted to assume the conflict resolves over months rather than weeks, with limited near-term price relief.
Felipe Elink Schuurman, CEO and co-founder of Sparta Commodities, told CNBC that the COVID-19 pandemic is a useful analogy for understanding what comes next. “Now the question is where is that demand destruction going to come from? Unfortunately, it’s going to be a situation where the richer countries are going to pay up. Maybe you don’t see $200 on crude, but you will see that on a regular basis on products, which is what people consume.” The implication is that wealthier importing economies will absorb the shock while poorer countries face humanitarian and economic pressure.
For investors, the Hochstein and Schuurman frameworks together suggest a barbell strategy: long upstream crude producers benefiting from sustained $90-100 pricing, but caution on downstream refiners and consumer-facing energy users that will eventually face margin compression as input costs cement above pre-conflict levels for an extended period. The next data point worth watching is whether Trump’s national security meeting this week produces a decision on restarting vessel escorts through Hormuz. For continuing coverage, see our geopolitics dashboard and Strait of Hormuz explainer.