JP Morgan warns oil could surge to $120 if Hormuz disruptions persist until July

JP MORGAN has cautioned that global oil prices could climb back toward their Iran-war highs of nearly $120 per barrel if vessel traffic through the Strait of Hormuz is not fully restored until July.

Although a ceasefire was declared earlier in the week, shipping activity through the vital oil transit route remains heavily restricted. Movements are still being closely monitored and approved by Iran’s Islamic Revolutionary Guard Corps (IRGC), limiting the flow of crude through the channel, Oilprice.com reported.

Maritime intelligence firm Windward confirmed on Thursday that the ceasefire has yet to translate into normal operations in the strait. According to the firm, vessel movement remains tightly controlled, coordinated, and selectively enforced, with no return to open commercial navigation.

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Market participants are pinning hopes on ongoing Iran–U.S. negotiations scheduled for the weekend, which could ease tensions and accelerate the reopening of the waterway to tanker traffic.

However, significant uncertainty persists, particularly around whether Iran is prepared to relinquish its strategic leverage over the strait as part of any agreement.

Initial optimism following the ceasefire that shipping would quickly resume has begun to fade. Analysts are now reassessing timelines and warning of renewed upward pressure on crude prices.

In a note released Friday, JP Morgan analysts said the market anticipates that about half of normal oil flows could resume by May, with a full recovery expected by June.

They added, however, that a slower return to pre-war levels, stretching into July, could push prices up by an additional $15 to $20 per barrel.

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As of early Friday, benchmark crude prices were trading between $95 and $97 per barrel.

Meanwhile, Goldman Sachs analysts on Thursday projected that Brent crude could average above $100 per barrel this year if disruptions in the Strait of Hormuz continue for another month.