JPMorgan warns oil could hit $120

JPMorgan said oil could climb back to $120 a barrel if shipping through the Strait of Hormuz does not fully recover until July. (bloomberg.com) The bank’s earlier note, published April 2, said crude could spike to $120 to $130 in the near term and move above $150 if disruptions lasted into mid-May. Its base case kept oil above $100 through the second quarter before easing later in 2026. (reuters.com) The immediate trigger is the Strait of Hormuz, the narrow waterway between Iran and the Arabian Peninsula that carries about 20 million barrels a day of crude and oil products. The International Energy Agency said that was about 25% of global seaborne oil trade in 2025. (iea.org) The U.S. Energy Information Administration said the strait has been effectively closed to shipping traffic since military action began on February 28. It said Brent crude averaged $103 a barrel in March and reached almost $128 on April 2. (eia.gov) That bottleneck matters because most Gulf exporters still depend on it. The International Energy Agency said Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Iraq, Bahrain and Iran use the passage as their primary oil export route, while only 3.5 million to 5.5 million barrels a day can be rerouted through alternative pipelines. (iea.org) The Energy Information Administration said the disruption has already forced producers to shut in large volumes of supply. In a press release on April 7, it estimated Iraq, Saudi Arabia, Kuwait, the United Arab Emirates, Qatar and Bahrain collectively shut in 7.5 million barrels a day of crude production in March. (eia.gov) JPMorgan is not the only bank warning about upside risk, though its numbers are among the highest published this month. Barclays said on April 9 that a quick normalization would fit its $85 Brent forecast for 2026, but delays in restoring traffic or any further escalation could push prices higher. (reuters.com) There are early signs of limited movement, but not a full return to normal. Reuters reported on April 11 that three supertankers exited the Gulf through Hormuz as United States-Iran talks began, in what appeared to be the first departures since the latest disruption. (reuters.com) For now, the market is trading on how long the passage stays constrained, not just whether it reopens. JPMorgan’s warning puts July at the center of that countdown. (bloomberg.com)