JP Morgan Sees Oil Above $100 Through 2026 Despite Strait Reopening Prospects

TL;DR: JP Morgan expects oil prices to linger in the low $100s for most of the remainder of 2025 and to average $97 for the full year 2026, even if the Strait of Hormuz reopens in the coming weeks. Aramco’s first‑quarter earnings climbed more than 25% year‑on‑year, illustrating how higher crude prices are boosting the bottom line of major exporters.

Context: The Strait of Hormuz, a narrow channel between Oman and Iran, moves roughly one‑fifth of the world’s oil and liquefied natural gas shipments each day. Since late February, Iran has threatened to target any vessel attempting to cross the waterway in retaliation for US‑Israeli strikes, effectively choking the flow. The resulting supply tightness has pushed Brent crude back above $100 a barrel after the April ceasefire, keeping markets jittery about further disruptions.

Key Facts: JP Morgan’s latest note projects that oil will stay in the low $100s for most of 2025 and average $97 for 2026 as a whole. The bank cautions that a swift return to normal shipping is unlikely; even an immediate reopening of the Strait would require several months for tanker availability, refinery ramp‑ups and broader logistics to rebalance the market. In parallel, Aramco reported Q1 earnings up over 25% compared with the same period in 2025, while peers such as BP and Shell also posted double‑digit profit gains.

What It Means: Higher oil prices raise costs for airlines, trucking firms, factories and households, contributing to upward pressure on inflation measures worldwide. Exporting governments and companies may channel the extra revenue into new exploration projects, dividend increases or share buybacks, though the scale of reinvestment remains uncertain. Ultimately, the timing of any price relief will hinge on how quickly the Strait reopens, how fast OPEC+ adjusts output, and how swiftly the global supply chain can absorb the backlog of delayed shipments.

Watch for announcements on the Strait’s reopening timetable and any OPEC+ output adjustments that could shift the price trajectory in late 2025.