JPMorgan Chase has projected that Brent crude prices could climb to $120 per barrel due to prolonged disruption of oil flows through the Strait of Hormuz in case of a full-scale war in the Middle East.
The bank estimates that Gulf producers could maintain normal output for roughly 25 days if the waterway is completely blocked. Beyond that point, storage facilities would become saturated, potentially forcing a broader production shutdown across the region.
Oil markets rallied sharply on Monday following the killing of Iran’s Supreme Leader Ali Khamenei in a joint U.S.-Israeli military operation. The strikes, carried out under “Operation Epic Fury,” targeted missile infrastructure, command centers and senior leadership in Iran.
In response, Iran launched missiles and drones targeting Israel and US military installations in the Persian Gulf, including sites in Bahrain and the United Arab Emirates.
Although the Strait of Hormuz has not been formally closed, shipping activity has fallen by approximately 70 percent. Around 200 tankers carrying crude oil and LNG have either anchored or rerouted to avoid the passage.
Major shipping companies, including Hapag-Lloyd and CMA CGM, have suspended transits through the strait.