Will the oil crisis erupt globally in April? JPMorgan maps out a "timeline chart": sequentially Asia, Africa, Europe, and the Americas!

China Finance Network News on March 27 (Editor: Huang Junzhi) As the U.S.-Iran war continues to escalate, a global crude oil crisis is beginning to take shape. According to analysts at JPMorgan Chase, the past four weeks of disruptions to oil transport through the Strait of Hormuz will create a “domino” impact on global supply; the shock will spread from east to west, so that in April most regions around the world will be affected.

In a newly released report on Thursday, JPM’s analysts noted that the global oil system is “shifting from a supply shock to an inventory depletion problem.” On February 28, the United States and Israel carried out a military strike on Iran. Since then, traffic through the Strait of Hormuz has basically come to a standstill, but Iran has adopted a “prudent strategy,” allowing some vessels to pass.

Analysts said that the key factors are not only the magnitude, but also the timing—because the transit time “determines the timetable.” JPM further emphasized that the market will face ongoing supply disruptions; these disruptions will occur “in sequence rather than simultaneously”—spreading westward, “driven by transport time and influenced by regional inventory imbalances.”

JPM also drew a “timetable map,” showing the impact the coming oil crisis will have on major regions worldwide, as well as the approximate timing of potential shocks. Based on the line’s projection, this potential crude oil crisis will “strike in sequence” around the world—starting with Asia, then moving through Africa to Europe, and ultimately reaching the United States; most regions will face the most concentrated pressure in April.

Specifically, JPM’s analysts explained that Asia’s dependence on crude oil and petroleum products from the Persian Gulf is extremely high, and it has already “started feeling the pressure.” Shipments sent out before the Strait of Hormuz effectively closed have largely been used up. The shipping time from the Persian Gulf to Asia is about 10 to 20 days; India will be hit first, followed closely by Northeast Asia.

JPM cited data showing that the severity of the impact will rise rapidly over time. The firm expects that in April, Southeast Asia’s oil demand will fall by about 300,000 barrels per day; if inventory releases by countries are limited to within their own borders, the decline in oil demand could quickly accelerate—exceeding 2 million barrels per day in May and approaching 3 million barrels per day in June.

JPM also mentioned that this week the Philippine government has announced entering a national energy emergency and said that the conflict in the Middle East poses an “imminent danger” to the country’s energy supply.

Immediately afterward, JPM’s analysts said that the next target of the crude oil crisis could be Africa, with the impact becoming more apparent in early April. They pointed out that if inland inventories are low, April oil demand could drop by as much as 250,000 barrels per day.

They continued by noting that by mid-April, Europe will feel the impact, but “the impact is more caused by rising costs and competition with Asia, rather than by direct shortages.”

Finally, because shipping times are longer, most oil cargoes are expected to stop arriving in the United States around April 15. However, JPM’s analysts believe that, backed by the country’s large domestic crude oil production capacity, the U.S. is unlikely to face a direct physical shortage in the near term.

They said the impact on the U.S. will be reflected mainly in price increases and a “misalignment” in the finished product market. The U.S. benchmark crude oil has risen by 41% cumulatively this month, but it can still be about $10 lower than the global benchmark Brent crude.

Now, it has become a widely held view that crude oil supply shocks will last longer. A recent warning from Macquarie strategists puts the probability that the conflict continues through June at about 40%.

And once this scenario comes true, the extreme case of oil prices surging to $200 per barrel and U.S. gasoline prices rising to $7 per gallon will no longer be just a theoretical exercise—it will create a real impact on global inflation expectations and consumer confidence.

(China Finance Network, Huang Junzhi)