Baker Hughes Warns Strait of Hormuz Recovery Delayed Until Late 2026

Baker Hughes executives have signaled that the Strait of Hormuz is unlikely to return to full operational capacity until the second half of 2026. During a first-quarter earnings call, CFO Ahmed Mogal indicated that the conflict between the U.S. and Iran is expected to persist at least through the end of June. This cautious outlook is widely shared across the energy sector. A Dallas Fed survey of nearly 100 oil and gas executives revealed that approximately 80% believe the strait will not reopen until August or later, with over 80% of respondents viewing further disruptions as likely. CEO Lorenzo Simonelli noted that geopolitical risk has become a structural reality for oil and gas markets. The closure has already removed 10% of global oil volumes and 20% of global liquefied natural gas (LNG) supplies from the market, which Simonelli warns will lead to persistent risk premiums for energy prices. The strait is a vital artery for global trade, historically handling roughly 20% of the world's oil supplies. The current crisis, now in its eighth week, has seen Iran choke off exports via tanker attacks, triggering the most significant oil supply disruption in history. Despite a fragile ceasefire agreement, tanker traffic remains minimal. Both the U.S. and Iran continue to enforce competing blockades in the region, including the seizure of commercial vessels, further complicating the timeline for a full reopening.