JPMorgan warns: If the Strait of Hormuz supply disruption continues until mid-May, oil prices could soar past $150!

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Source: Caixin Global

Caixin Global, April 3 (edited by Bian Chun). In a report released Thursday, JPMorgan Chase said that in the short term, oil prices could rise to between $120 and $130 per barrel. If disruptions to oil supply through the Strait of Hormuz continue until mid-May, there is even a risk of oil breaking above $150.

JPMorgan’s baseline assumption is that, after a period of supply tightness and declining inventories, the issue of supply disruption in the Strait of Hormuz will ultimately be resolved through negotiations.

The report noted that in this scenario, oil prices are expected to remain at elevated levels above $100 per barrel throughout the second quarter. Then, driven by partial reopening of the strait and a gradual normalization of oil inventories, oil prices are expected to fall in the second half of 2026.

JPMorgan warned that the magnitude and duration of the jump in oil prices will be key factors in determining how severe broader macroeconomic shocks will be. If high oil prices persist, it could worsen risks of weak demand and may trigger an economic recession.

On Thursday, oil prices surged significantly amid choppy trading. Earlier, U.S. President Donald Trump said the United States would continue launching attacks on Iran. As of the close, Brent crude futures rose by $7.87, or 7.78%, to $109.03 per barrel. U.S. crude futures rose by $11.42, or 11.41%, to $111.54 per barrel.

This week, reports said that as the Strait of Hormuz continues to be obstructed, the Trump administration is internally assessing the risk that oil prices could climb to $150 per barrel or even higher. The reports also said the government currently views oil prices above $100 as a “benchmark scenario,” and it does not rule out the extreme possibility that oil could spike to $200.

The average U.S. gasoline price this week has already surpassed $4 per gallon, the first time since 2022. Energy expert Patrick De Haan said that if the Strait of Hormuz cannot restore passage in the near term, U.S. gasoline prices could exceed $5 per gallon within a month, setting a historical high.

At present, analysts and investors are closely watching when and how the Strait of Hormuz—the throat of energy transport—will reopen in order to ease the severe supply shock facing Asian economies.

On Thursday, as more news about the Strait of Hormuz emerged, market optimism about the partial restoration of navigation through the strait increased.

According to reports from domestic media citing Iranian official media on Thursday, Iran and Oman are drafting an agreement aimed at implementing “traffic monitoring” for the transport of ships through the Strait of Hormuz, while also emphasizing that it will not restrict ship passage. Meanwhile, the United Kingdom said dozens of countries are discussing plans to end the Iran crisis.

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Byline: Zhao Siyuan