Oil risk: $120 warning

JPMorgan says oil could climb back toward $120 a barrel if shipping through the Strait of Hormuz does not fully recover until July. (bloomberg.com) The bank said markets are still betting on a faster restart: about half of normal flows by May and a full return by June. If that slips by a month, JPMorgan sees another $15 to $20 a barrel of upside from prices that were just under $100 on April 10. (bloomberg.com) This warning comes days after the United States and Iran agreed to a two-week ceasefire on April 8, a deal brokered with Pakistan’s help. Oil fell below $100 after that announcement, but CNBC reported prices were still far above pre-war levels of about $70 a barrel. (cnbc.com) The strait matters because it is the narrow sea lane linking the Persian Gulf to world markets. Bloomberg said it normally handles about a quarter of global seaborne oil trade, while other recent reports have put the share closer to one-fifth of global oil flows. (bloomberg.com) (reuters.com) The immediate problem is not only politics but traffic. JPMorgan said 346 energy-related vessels were still trapped inside the Persian Gulf as of April 9, including 241 carrying cargoes such as 104 million barrels of crude and condensate, 1.3 million tons of liquefied natural gas, and 5.5 million barrels of liquefied petroleum gas. (bloomberg.com) There are early signs of movement, but not a clean reopening. Bloomberg reported on April 11 that three supertankers had sailed through Hormuz, while Reuters reported the same day that two United States warships crossed as part of a mine-clearing plan. (bloomberg.com) (reuters.com) Other banks are sketching a less severe path if the ceasefire holds. Goldman Sachs cut its second-quarter 2026 forecasts on April 9 to $90 for Brent and $87 for West Texas Intermediate, down from $99 and $91, citing a lower risk premium and some oil flows edging back through the strait. (reuters.com) JPMorgan’s own range has shifted with the timeline. On April 2, Reuters reported the bank saw $120 to $130 oil in the near term and a risk above $150 if Hormuz disruptions lasted into mid-May; by April 10, the focus had moved to whether a slower recovery into July would send prices back toward the March war peak near $120. (reuters.com) (bloomberg.com) For now, the market is trading the gap between a ceasefire on paper and a shipping lane that is still only partly functioning. The next test is whether weekend talks between Washington and Tehran produce enough confidence for tankers, insurers, and traders to treat Hormuz as open again. (bloomberg.com) (cnbc.com)