Peter Schiff rarely holds back. The outspoken investor and co-founder of Echelon Wealth Partners took to X on May 6 with a blunt assessment that cut against the market’s sudden optimism. Stocks, bonds, and gold climbed. Oil and the dollar slid. All of it traced back to fresh hopes that the nascent war with Iran might wrap up soon. Schiff wasn’t buying it.
“I doubt it’s really over, as either Iran will break the deal, or Trump will decide they broke it,” he wrote. “Oil prices won’t return to pre-war levels.” Those words, first reported in detail by Yahoo Finance, landed as West Texas Intermediate crude hovered near $93 a barrel and Brent crude sat just below $100. U.S. gasoline prices, meanwhile, had already pushed past $4.50 a gallon nationally.
The conflict’s shadow still hangs heavy. Disruptions in the Strait of Hormuz earlier this year sent prices spiking above $120 at points. Production outages, shipping reroutes, and heightened geopolitical risk baked in a persistent premium. Even as diplomats floated cease-fires and proposals funneled through Pakistan, fresh clashes and missile exchanges kept traders on edge. Recent coverage from CNBC detailed how prices swung wildly on conflicting signals from Washington and Tehran, with Brent dropping 4% on one reassurance from Defense Secretary Pete Hegseth that the cease-fire held despite attacks on the United Arab Emirates.
But the numbers tell a complicated story. The U.S. Energy Information Administration’s latest Short-Term Energy Outlook, released in early April, projects Brent averaging $96 this year before sliding below $90 in the fourth quarter and reaching $76 in 2027. That forecast leans on the assumption that supply disruptions ease and production returns. OPEC’s own monthly reports point to demand growth of 1.4 million barrels a day in 2026, mostly outside the OECD. Yet those projections feel increasingly detached from ground realities in the Gulf.
Schiff’s skepticism carries weight because he has called major turns before. He warned about housing in the mid-2000s. Now he sees fiscal and monetary responses to energy shocks as the real inflation driver. Soaring oil, in his view, won’t itself ignite consumer prices. The stimulus and money printing that follow to cushion a slowdown will. A March 2026 Business Insider roundup captured him arguing exactly that amid prices nearly doubling in early 2026.
And prices did surge. WTI climbed over 67% year-to-date by early May, according to Schiff’s own posts. At peaks it flirted with $106 and beyond. Refiners in Asia and the Middle East slashed runs by millions of barrels daily. Jet fuel and naphtha demand cratered in affected regions. The International Energy Agency noted in its April report that global oil demand could contract outright in 2026 for the first time since the pandemic, a reversal of prior growth forecasts by 730,000 barrels a day.
Traders have noticed the volatility. Bearish bets piled up. Lawmakers took notice. Former Rep. Marjorie Taylor Greene highlighted trades worth $920 million in crude oil futures placed just before reports of a potential U.S.-Iran agreement. Sen. Elizabeth Warren pointed to perfectly timed positions on prediction markets ahead of February strikes. Whether insider trading or sharp speculation, the episode underscored how closely markets watch every headline from the region.
Yet the broader economic ripple effects spread further. Higher energy costs feed directly into fertilizer prices, transportation, and food. Coffee and other commodities have already felt the pressure. JPMorgan analysts warned in recent notes that gasoline could test $5 a gallon if disruptions linger. Saudi Arabia’s fiscal breakeven sits near $90. Sustained lower prices would strain budgets across OPEC producers who have already shown willingness to cut output voluntarily.
Schiff isn’t alone in expecting higher-for-longer energy costs. Interviews with metals strategist Andy Schectman earlier this year highlighted how elevated oil and reduced real interest rates could support gold and silver through 2026. The pair see stimulus arriving before midterm elections as politicians respond to consumer pain at the pump. That stimulus, of course, risks adding fuel to the inflationary fire Schiff anticipates.
Market reactions remain schizophrenic. One day hopes of peace send oil lower and equities higher. The next, renewed drone activity or tanker incidents reverse the flow. As of early May, WTI futures traded around $95 after a bruising weekly drop of 7%, per updates from Reuters. Brent settled near $101. The fragile nature of any truce leaves little room for complacency.
Longer term, structural questions loom. Global spare capacity remains thin after years of underinvestment in conventional production. Non-OPEC supply growth, particularly from U.S. shale, faces higher costs and declining well productivity in some basins. Demand destruction from high prices could cap upside, but it also signals economic strain that central banks must address.
Schiff’s core point stands out sharply. Pre-war oil prices reflected a different risk calculus. That calculus changed when conflict reached the world’s most important energy chokepoint. Even if fighting pauses, insurance costs for tankers stay elevated. Shipping routes stay longer. Investment decisions stay cautious. The risk premium doesn’t vanish overnight. Or perhaps at all.
Gasoline prices at the pump have already delivered that message to American drivers. At $4.54 a gallon, the impact shows up in household budgets and corporate margins alike. Airlines hedge fuel. Manufacturers pass on costs. Consumers cut elsewhere. The feedback loop strengthens the case for structural elevation in crude benchmarks.
Forecasters at J.P. Morgan see Brent averaging $60 next year under soft supply-demand balances and inventory builds. The EIA is more measured but still expects meaningful declines by late 2026. Those outlooks assume resolution and return to normal flows. Schiff assumes neither. History suggests caution. Deals in the Middle East have unraveled before on far less provocation.
So investors face a bifurcated path. Optimists bet on diplomacy and demand restraint. Skeptics like Schiff prepare for persistent supply anxiety and the policy responses it provokes. Gold’s concurrent strength offers one hedge. Energy equities and certain commodity producers offer another. The coming months will test which camp read the situation more accurately.
One thing appears clear. The era of sub-$80 oil as a base case may have ended with the first strikes on Hormuz. Markets can rally on cease-fire hopes. They can sell off on rumors of peace. But the floor feels higher now. Schiff said as much in a few terse sentences on social media. The price action since suggests he may be onto something. Again.
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