JPMorgan: Brent crude oil is expected to stay above $100 in 2026, with ongoing tight supply in the energy market

Investing.com - JPMorgan Chase said in its latest report that even if the Strait of Hormuz reopens in June, Brent crude oil prices may still stay at levels just above $100 for most of 2026. Accelerated inventory drawdowns and ongoing logistics bottlenecks will continue to support a tighter-than-usual oil market.

JPMorgan’s revised analytical framework holds that the rapid depletion of oil inventories will ultimately drive the reopening of the Strait of Hormuz. Its baseline scenario is set as: assuming both sides issue credible statements and confirm each other, the strait will resume passage on June 1, as reported by Reuters.

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JPMorgan said that in the short term, oil prices are difficult to return to normal levels. OECD commercial inventories are nearing the operational pressure critical point—seasonal rebounds in summer demand, together with the large-scale decline in commercial inventories already seen in March and April (which may continue into May). Even if the strait reopens in June, OECD inventories may still reach operational pressure levels around August.

Earlier, Amin Nasser, CEO of Saudi Aramco, warned that the current energy supply shock is the largest ever in history. If the Strait of Hormuz remains disrupted, the process of normalizing the oil market could be delayed until 2027.

Speaking during the company’s Q1 earnings analysts’ conference call, he said: “The longer the duration of the supply disruption— even just a few more weeks—the more significantly the time required for the oil market to rebalance and stabilize will be extended.”

JPMorgan also noted that market bottlenecks could shift from the strait itself to factors such as insufficient tanker capacity, refinery capacity ramp-ups, and broader logistics constraints—keeping the tight supply situation in the oil market going into the second half of 2026.

JPMorgan currently expects Brent crude oil to average $96 per barrel in 2026, with Q2 averaging $103, Q3 averaging $104, and Q4 averaging $98.

Looking ahead to 2027, JPMorgan expects that after the strait reopens, the Gulf oil-producing countries will do their best to boost production to make up for earlier revenue losses. High oil prices will also encourage other oil-producing countries to run at full capacity, pushing the market into a noticeable oversupply situation starting from September 2026.

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