Oil Market Recovery Could Drag Into 2027 as Hormuz Crisis Deepens

The oil market will not normalize until 2027 if the disruption in the Strait of Hormuz persists past the middle of June, Saudi Aramco CEO Amin Nasser warned Monday . "If the Strait of Hormuz opens today, it will still take months for the market to rebalance, and if its opening is delayed by a few more weeks, then normalization will last into 2027," Nasser told investors on the company's first-quarter earnings call .

The oil market is losing 100 million barrels of supply every week the strait remains closed , according to the head of the world's largest oil company. The market has already lost more than 1 billion barrels due to the Hormuz closure, with the net loss around 880 million barrels thanks to redirected exports through Aramco's east-west pipeline and the release of strategic reserves by governments . Just two to five ships pass through Hormuz daily right now compared with 70 vessels before the war .

The warning comes as President Donald Trump appeared to dismiss Iran's response to a U.S. peace plan over the weekend, sending oil prices higher. According to market data, WTI Crude traded at $71.50 per barrel on Monday, up 0.6%, while Brent Crude stood at $75.20 per barrel, up 0.5%.

Trump-Xi Summit Puts Energy at Center Stage

U.S. President Donald Trump will pay a state visit to China from May 13 to 15 at the invitation of President Xi Jinping, the foreign ministry in Beijing said Monday . The timing intersects with a precarious US-Iran ceasefire and a dual blockade of the Strait of Hormuz that is driving up energy prices and weighing on global economic growth .

The meeting, originally scheduled for March, was delayed after Washington became embroiled in its war against Iran, which has triggered the world's most severe energy shock in history . China will try to avoid appearing to pressure Iran in a way that would seem to support the United States, though it will encourage President Trump to reach an agreement that reopens the Strait of Hormuz , according to analysis from the Center for Strategic and International Studies.

The U.S. Energy Information Administration estimates that China added an average of 1.1 million barrels per day of crude oil to strategic reserves in 2025, with preliminary government data indicating that China has continued to build inventories in 2026 ahead of the Iran conflict, meaning government and commercial oil stockpiles in China averaged around 360 million barrels in December 2025 . China's crude buying binge has helped to prevent even higher spikes in oil prices amid the Strait of Hormuz deadlock and has also provided a lifeline to Asian importers that have been most directly impacted by the halt in Middle East energy deliveries .

Natural Gas Markets Rally on Weather and Supply Concerns

While oil grabs headlines, natural gas markets are heating up too. Physical natural gas prices for Tuesday delivery strengthened across much of the United States as warmer weather forecasts, pipeline maintenance and improving regional demand expectations supported cash markets, while a sharp rally in futures added momentum to the gains , according to Natural Gas Intel.

According to market data, Henry Hub Natural Gas traded at $3.25 per MMBtu on Monday, down 2.4% from the previous session. The volatility reflects shoulder season uncertainty as the market transitions between heating and cooling demand.

AI Power Hunger Fuels Infrastructure Boom

Away from the Middle East crisis, a different energy story is unfolding in the power sector. GE Vernova now targets revenue between $44.5 billion and $45.5 billion for 2026, a notch higher than its earlier range, after logging $18.3 billion in orders for the quarter, with Chief Executive Scott Strazik calling demand "accelerating," and the company reporting $2.4 billion in equipment orders tied to data centers for the quarter—topping the total for all of last year .

Orders tied to data-center electrification are expected to climb 29% year-on-year to $24.8 billion in 2026, while backlog in the Electrification segment is projected to rise 31% to about $45.3 billion , according to S&P Global Market Intelligence. Demand for grid equipment such as transformers, switchgear and substations has been particularly strong as operators upgrade networks to accommodate higher loads and maintain grid stability .

MarketWatch reported that infrastructure giants such as GE Vernova and Bloom Energy are emerging as the new gatekeepers of the AI grid, positioning themselves to capture a share of Big Tech's estimated $700 billion AI energy investment.

What Comes Next

Nasser predicted a very robust return to demand growth once normal shipping and trade resume , but the path to normalization remains uncertain. "The risk of a proposed U.S. peace deal breaking down will likely keep oil markets volatile," according to ANZ Research .

The convergence of the Hormuz crisis, the Trump-Xi summit, and surging AI power demand creates an unusually complex moment for energy markets. The future trajectory of the U.S.-China relationship will have massive consequences for the global economy, with Cornell University professor Eswar Prasad noting that "the entire world will be hoping that the two leaders can reach agreement on at least a subset of issues," with the outcome having major ramifications for global trade, geopolitics and "the very survival of the rules-based order" .

For now, traders are watching three variables: whether Trump and Xi can forge any agreement on energy cooperation, whether Iran's response to U.S. peace proposals gains traction, and whether the physical infrastructure of global oil markets can recover from what multiple sources have called the largest supply disruption in history.