Oil Edges Back Toward Wartime Peaks

Oil may retest levels seen at the height of the Middle East war if cargo flows through the Strait of Hormuz do not fully recover until July, JPMorgan Chase warned. Bloomberg reported on April 10 that the market is currently pricing in a rapid normalization, with roughly half of normal flows restored by May and a full recovery by June. In a note dated April 10, analysts led by Parsley Ong said that a slower return to 100% of pre-war volumes by July could add another $15 to $20 a barrel to prices.

By April 10, oil was again trading near the $100-a-barrel threshold. Market coverage from major business outlets showed Brent crude in roughly the $96 to $99 range, while West Texas Intermediate moved toward $99 to $100 a barrel. That rebound followed a short-lived pullback after hopes for a ceasefire between the United States and Iran.

Why the Strait of Hormuz matters again

The Strait of Hormuz remains one of the most critical chokepoints in the global energy system. The US Energy Information Administration said average oil flows through the strait reached about 20 million barrels a day in 2024, equivalent to around 20% of global petroleum liquids consumption. The International Energy Agency separately says the strait carries about a quarter of the world’s seaborne oil trade, with around 80% of those flows heading to Asia.

Its importance is amplified by the lack of substitutes. The International Energy Agency estimates that alternative pipeline routes can redirect only about 3.5 million to 5.5 million barrels a day. That means a prolonged disruption cannot be fully offset by existing infrastructure, even if producers try to reroute exports.

What is happening to tanker traffic

Even after the ceasefire announcement, the market has not received convincing evidence that shipping has returned to normal. Bloomberg’s accessible article text makes clear that investors are still assuming a relatively fast recovery in Hormuz traffic, while JPMorgan argues that such expectations may be too optimistic. Other reports on April 9 and 10 likewise described the waterway as still heavily constrained rather than fully normalized.

The speed of the recovery matters as much as the legal status of the route. If current prices already assume near-normal flows by June, then even a short delay can force traders to revise supply balances, shipping costs and inventory assumptions. That is why JPMorgan’s estimate of an additional $15 to $20 a barrel drew so much attention across the market.

How the market is reacting to the fragile ceasefire

The ceasefire effect on oil prices proved brief. Crude fell sharply after the two-week truce was announced, then rebounded as traders questioned the durability of the deal and saw that maritime traffic through Hormuz was recovering more slowly than expected. Associated Press reported that Iran accepted a two-week ceasefire and talks with the United States, but uncertainty remained over the scope and durability of the arrangement.

Additional concern came from renewed risks to regional energy infrastructure. Market reports on April 10 said worries over attacks on Saudi facilities and persistent constraints in Hormuz helped push crude back higher. That has restored a wartime-style risk premium, where prices reflect not only present supply and demand but the probability of fresh disruption.

What higher oil means for the world economy

Oil near $100 a barrel is already an inflation risk for energy-importing economies. The International Energy Agency has warned that a closure of Hormuz would affect not only oil but also liquefied natural gas. According to the agency, exports from Qatar and the United Arab Emirates passing through the strait account for almost 20% of global liquefied natural gas exports. A prolonged bottleneck therefore strains oil, gas and shipping markets at the same time.

Asia is especially exposed because it receives most of the crude moving through the strait. Europe is also vulnerable, not only through oil prices but through tighter competition for alternative fuel and gas supplies. Even without a physical shortage, uncertainty over the timing of a shipping recovery raises freight, insurance and forward pricing across energy markets.

Why JPMorgan’s scenario matters

JPMorgan’s assessment matters because it highlights the gap between current market pricing and a slower recovery path. If the consensus view still assumes something close to normal flows by June, then a delay until July would be enough to reopen the path toward wartime highs. That makes the next several weeks critical for traders, refiners, airlines and governments exposed to imported fuel costs.

The bank’s call also fits into a broader pattern of warnings issued since early March. Bloomberg had previously reported that analysts saw oil potentially rising toward $100 to $120 a barrel if Hormuz traffic failed to normalize quickly or if regional energy infrastructure were hit. JPMorgan’s latest note does not stand apart from that debate. It sharpens the same risk by attaching it to a specific recovery timeline.

As International Investment experts report, JPMorgan’s warning matters not only as a price forecast but as evidence that the oil market remains hostage to logistics in the Strait of Hormuz. Until investors see a durable and verifiable recovery in cargo flows, the wartime risk premium is likely to remain embedded in crude prices, and any renewed break in the ceasefire or attack on energy infrastructure could quickly push the market back toward the extreme levels seen in spring 2026.

FAQ

Why is the Strait of Hormuz so important for oil markets?
Because it carries about 20 million barrels a day of oil, roughly 20% of global petroleum liquids consumption, and around a quarter of global seaborne oil trade.

What exactly did JPMorgan warn about?
The bank said that if cargo flows through Hormuz do not fully recover until July, oil prices could face an extra $15 to $20 a barrel upside risk relative to what the market is currently pricing in.

Why did oil fall and then rise again?
Prices initially dropped on ceasefire hopes, then rebounded when traders questioned whether the truce would hold and whether tanker flows through Hormuz would normalize quickly.

Can other routes replace the Strait of Hormuz?
Not fully. The International Energy Agency says alternative pipelines can redirect only about 3.5 million to 5.5 million barrels a day, far below normal traffic through the strait.

Why does this matter beyond oil traders?
Because higher crude prices feed inflation, raise transport and fuel costs, and can also disrupt liquefied natural gas trade through the same route.