MW JPMorgan analyst tempts Scott Bessent's wrath once more with projections of oil shortages, possibly in California

By Jules Rimmer

Global inventories of oil have already begun to fall

People queue to refuel at a fuel station in Ahmedabad on March 23, 2026 following import disruptions caused by the Middle East war.

The JPMorgan commodities analyst who previously was criticized by Treasury Secretary Scott Bessent over her analysis of the impact of the Iran war now is forecasting global shortages, possibly in California.

This would appear to contradict directly the statements made during a cabinet meeting held Thursday in which Bessent said "the U.S. oil market is well-supplied."

The head of JPMorgan's global commodities strategy team, Natasha Kaneva, was on the receiving end of harsh words from Treasury Secretary Scott Bessent earlier this month when she questioned the feasibility of insuring oil tankers seeking safe transit through the Strait of Hormuz.

The scenarios she now projects are alarming for traders, economists and consumers alike.

Of particular concern may be Kaneva's observation that California is particularly vulnerable as the most exposed region in the U.S. The state is structurally isolated from the broader U.S. system and heavily dependent on imports from Latin America, Canada, Asia and the Middle East.

"As a result, the U.S. will initially experience a price shock, but for the West Coast, this is likely to evolve into a physical supply challenge by late April and May, as replacement options dwindle and competition for suitable crude intensifies," she said.

Kaneva and the report's fellow authors, Artem Fakhretdinov and Lyuba Savinova, begin with the following prediction: "Much like during the pandemic, the shock unfolds sequentially rather than simultaneously - a rolling supply disruption moving westward, dictated by shipping times and buffered unevenly by regional inventories."

Kaneva uses the following assumptions: it takes 10 to 20 days for tankers to sail from the Gulf to Asia, 20 to 35 days to make it to Europe and Africa with voyages to the U.S. Gulf Coast the longest at around 35 to 45 days.

First to take the hit, JPMorgan posits, is Asia. Its reliance on Gulf crude and refined products is heavy and already, the team notes, pre-closure cargoes have dried up. If reserves of crude remain contained within their respective countries, Southeast Asia could be short of 2 million to 3 million barrels of crude daily.

Next to feel the pinch would be the continent of Africa. The effects of a shortage could be felt in early April, Kaneva suggests, with Europe only a week or so behind. She doesn't foresee outright shortages just yet but rising costs seem inevitable given competition with Asia for supplies. Elevated prices are likely to drive demand reduction.

Last in the chain is the U.S, partially insulated for the time being owing to the longer journey times and substantial domestic production. Kaneva reckons the impact will mostly be felt through higher prices and dislocations in refined products rather than the simple scarcity.

Kaneva is already observing stock depletion in global inventory data. In the first three weeks of March, she discovered a fall of 155 million barrels, mainly triggered by a 211 mbpd drop in oil in transit.

Global oil inventories MoM change

Governments have wasted no time in implementing preventative and emergency measures to stretch supplies and cushion the price shock but worryingly, she finds that signs of physical tightening are already apparent.

Brent crude (BRN00) on Friday was trading 3% higher to $104.61, a rise of 72%.

-Jules Rimmer

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March 27, 2026 08:35 ET (12:35 GMT)

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