Shipping traffic through the Strait of Hormuz has nearly ground to a halt, shattering the market's pricing assumption that "extreme supply disruptions remain a low-probability event." The crude oil market now faces a rapid reassessment of geopolitical risk premiums. The future price trajectory will primarily depend on the duration of the conflict and the actual scale of supply disruption, rather than long-term supply and demand fundamentals.

According to JPMorgan's flash commentary report titled "Pricing a Risk That Has Not Yet Materialized," issued on March 1, the slowdown of tanker traffic in the Strait of Hormuz to a near-standstill forces the market to reassess geopolitical risks and the resilience of global energy trade.

However, the report also emphasizes that the Strait of Hormuz has not been officially closed, and the waterway has not suffered direct attacks. If the conflict de-escalates quickly, the impact on oil prices may be short-lived. If the situation escalates and persists for several weeks, Brent crude could rise to a range of $100 to $120 per barrel.

JPMorgan believes the direction of oil prices will hinge on four key variables: the number of barrels affected, the conflict's duration, the ability of alternative supplies to fill the gap quickly, and the broader geopolitical trajectory.

As of the time of writing, Brent crude was quoted at $79.4 per barrel.

**Black Swan Lands: Near-Total Paralysis of the Strait of Hormuz**

On March 1, 2026, a joint US-Israel military operation officially commenced. Former President Trump publicly declared that the objectives extend beyond destroying Iran's military capabilities, explicitly aiming to create conditions for a change in the Iranian regime.

This event triggered a de facto blockade of the world's most critical energy transit chokepoint, the Strait of Hormuz. According to JPMorgan data, oil exports passing through the Strait plummeted from a normal level of approximately 16 million barrels per day to about 4 million barrels per day on February 28, with almost all of the remaining flow consisting of Iranian crude.

**Variable One: Actual Barrels Impacted – 15.8 Million bpd of Capacity in Limbo**

Although the Strait of Hormuz has not been formally declared closed, the shipping market has effectively implemented a blockade through its actions.

Major global shipping giants have announced suspensions of transit:

- Maersk: Suspended all vessel transits through the Strait of Hormuz effective March 1. - Hapag-Lloyd: Halted transits and imposed war risk surcharges on Gulf cargo, effective March 2. - CMA CGM: Ordered vessels in or heading to the Gulf region to divert to safe havens. - MSC: Suspended all new bookings for Middle East cargo. - NYK Line, Mitsui O.S.K. Lines, and Kawasaki Kisen Kaisha: Suspended all voyages through the Strait of Hormuz.

Signals from the insurance market are equally clear: war risk insurers and Lloyd's underwriters have issued notices of policy cancellations and repricing, with war risk premiums potentially increasing by up to 50%.

Substitute transit capacity is insufficient. The Strait of Hormuz normally handles about 19 million bpd of liquid exports, including roughly 16 million bpd of crude oil. Existing bypass pipelines in Saudi Arabia (Petroline pipeline, capacity 5 million bpd) and the UAE (Abu Dhabi pipeline, capacity 1.5 million bpd) can only divert a combined 3.3 million bpd, leaving approximately 15.8 million bpd of crude exports with no alternative evacuation route.

Currently, known damage to oil and gas infrastructure remains relatively limited. Missiles launched by Iran towards Riyadh and eastern provinces of Saudi Arabia were successfully intercepted without hitting any energy facilities. A sanctioned empty tanker with an 80 bpd capacity was hit near Oman. A tanker carrying 500 bpd of gasoline was attacked. One berth at Dubai's Jebel Ali port was damaged by debris and temporarily closed. Core oil and gas infrastructure has not yet suffered direct strikes.

**Variable Two: Conflict Duration – 25 Days is a Critical Threshold**

JPMorgan estimates that the seven major oil-producing nations reliant on Hormuz for exports (Saudi Arabia, UAE, Iraq, Kuwait, Iran, Qatar, Oman) collectively possess about 343 million barrels of available onshore crude storage capacity. At current production levels, this provides a buffer equivalent to approximately 22 days of production.

Furthermore, around 60 empty tankers currently anchored in the Gulf could absorb an additional 50 million barrels of crude, extending the buffer by 3-4 days.

The conclusion is that Gulf producers could maintain normal production for a maximum of about 25 days in a scenario of a complete Hormuz disruption. Beyond this point, exhausted storage capacity would force production cuts.

Regarding the conflict's duration, former President Trump stated in an Axios interview that the plan involves at least five days of bombing, but he also mentioned "several exit options" and estimated in another interview that strikes on Iran could last about a month. This uncertainty makes the 25-day threshold a critical risk observation point.

**Variable Three: Alternative Supply and Strategic Reserves – The Only Immediate "Fire Extinguisher"**

The market entered this crisis in a clear state of oversupply. In the first two months of 2026, the global crude market was oversupplied by about 1.4 million bpd, providing an initial buffer against short-term shocks.

However, if the conflict exceeds 25 days, forced production shutdowns would remove up to 16 million bpd of crude and refined product exports from the market. Nearly all the world's effective spare capacity is located in the Persian Gulf region itself, creating a dilemma where "the only rescue force is inside the burning building."

- US shale oil: Can respond, but is constrained by drilling, completion, and infrastructure lead times, meaning incremental supply would take months to materialize. - Russia: Could theoretically increase output by 0.3-0.4 million bpd, but this is a drop in the bucket compared to the potential shortfall and also requires time. - Other non-OPEC producers: Lack both spare capacity and short-cycle response capability.

Strategic petroleum reserves are the only near-term buffer mechanism available. OECD member nations hold strategic petroleum reserves of approximately 1.247 billion barrels, comprising 935 million barrels of crude and 312 million barrels of products. This represents the last line of defense against a global oil price spiral in an extreme scenario.

**Variable Four: Subsequent Developments – Can the "Venezuela Model" Be Replicated?**

JPMorgan maintains its previous political assessment: the ultimate goal of the US-Israel action is not "regime change" but "behavior change." This involves implementing a "precision reshaping" of Iran similar to the approach taken with Venezuela, aiming to force the Iranian regime to the negotiating table without triggering complete state collapse.

Former President Trump claimed that members of Iran's Revolutionary Guard are seeking exemptions and that Iran is prepared to negotiate, suggesting a potential window for diplomatic resolution. If the conflict de-escalates before sunset on Monday (the start of the Jewish holiday of Purim), the oil price spike may prove temporary.

A key tail risk involves the Iranian regime losing command and control over the Islamic Revolutionary Guard Corps (given hints of this emerging during recent attacks in Oman), which would introduce a more unpredictable and unstable situation. Retaliatory actions by Hezbollah could further amplify this risk.

Meanwhile, Russia and China have so far issued only formal statements of concern without making substantive economic or military commitments, and do not currently constitute additional variables for escalation.

JPMorgan cited historical data from eight medium-to-large oil-producing nation regime changes since 1979, providing a highly relevant quantitative pattern: from the outbreak of conflict to the price peak, oil prices rose by an average of 76%. On average, prices increased by about 5% in the first month after the conflict began, expanding to an average gain of 30% within three months, often stabilizing around 30% above pre-conflict levels.

The 1979 Iranian Revolution serves as the most direct historical reference. Iran's crude production plummeted from 5.3 million bpd in 1978 to 3.17 million bpd in 1979, and further to 1.4 million bpd by 1981. In January 1979, Iranian crude exports abruptly fell by 4.8 million bpd, representing about 7% of global supply at the time. Panic buying and speculative hoarding drove prices from $13 per barrel in mid-1979 to $34 per barrel by mid-1980, directly triggering a global economic recession. Prices did not return to pre-crisis levels until the mid-1980s. Today, Iran's crude production remains around 3.3 million bpd, still far below pre-revolution levels.

**JPMorgan's Existing Forecasts Unchanged for Now, but Extreme Scenario Window is Open**

Synthesizing these four variables, JPMorgan clearly stated that it is not adjusting its existing oil price forecasts at this stage. Its 2026 average Brent crude price forecast remains at $58 per barrel (Q1 2026: $60, Q2 2026: $59, Q3 2026: $56, Q4 2026: $55).

However, JPMorgan also provided a clear scenario boundary: if the conflict persists for more than three weeks, Gulf producers' storage will be exhausted, forcing production cuts, and Brent crude could trade in the $100-$120 range.

For investors, the core message is that the crude oil market has shifted from "pricing known fundamentals" to "pricing unknown risks." The 25-day mark is the watershed between a short-term price spike and a structural supply crisis. Until the conflict's direction becomes clearer, high volatility in the energy sector will persist. Movements in strategic reserves and signals from diplomatic engagements will be key leading indicators for judging the price peak.