(Investing) – JPMorgan expects Brent crude to remain in the low-$100s for much of 2026, even if the Strait of Hormuz reopens in June, as accelerating inventory draws and logistical bottlenecks keep the oil market tight, the bank said in a note.
The bank’s revised framework assumes that the pace of oil inventory depletion will ultimately force the Strait to reopen, with its base case anchored on a June 1 reopening following a credible announcement confirmed by both sides, per Reuters.
Prices are unlikely to normalize quickly, as OECD commercial inventories approach operational stress levels, JPMorgan said. The seasonal lift in summer demand, combined with the large commercial stock draws seen in March and April, and likely again in May, should push OECD inventories toward operational stress levels by August, even if the Strait reopens in June.
Earlier, Saudi Aramco CEO Amin Nasser warned that the ongoing energy supply shock is the largest the world has ever experienced, and continued disruption of the Strait of Hormuz could delay oil market normalisation into 2027.
“The longer the supply disruptions continue, even for another few more weeks, it is going to take a much longer time for the oil market to rebalance and stabilize,” he told analysts on a call to discuss the company’s first-quarter results.
The bottleneck would likely shift from the Strait itself to tanker availability, refinery ramp-ups and wider logistical constraints, keeping the market tight well into the second half of 2026, the bank said.
JPMorgan now expects Brent to average $96 per barrel in 2026, with quarterly averages of $103 in the second quarter, $104 in the third quarter and $98 in the fourth quarter.
Looking into 2027, JPMorgan expects producers in the Gulf to maximize output after the Strait reopens in an effort to recoup lost revenues. High prices are also expected to encourage other producers to run at capacity, pushing the market into meaningful oversupply from September 2026.
