JPMorgan Chase & Co. has projected that global crude oil prices are likely to remain in the low $100s per barrel for an extended period, even if the Strait of Hormuz resumes normal operations in the coming weeks. The investment bank's revised assessment, released on 12 May 2025, attributes the sustained price pressure to persistent supply disruptions, refinery constraints, and tanker availability shortfalls linked to ongoing tensions in West Asia.

Key Projections from JPMorgan

JPMorgan has projected that Brent crude could average around $97 per barrel in 2026, signalling that tight supply conditions are expected to persist well into the medium term. The bank's report noted that a reopening of the Strait of Hormuz alone would not immediately stabilise energy markets, as logistical challenges across the broader oil transport network are likely to persist for months after any resumption of normal shipping operations.

Disruptions in shipping lanes, refinery operations, and tanker availability are expected to continue weighing on global energy supply chains, preventing a swift correction in prices even under an optimistic geopolitical scenario.

Oil Prices Surge on Fresh US-Iran Tensions

Meanwhile, crude prices surged on Tuesday, with international benchmark Brent crude trading above $105 per barrel — up approximately 1 per cent — after US President Donald Trump publicly criticised Iran's response to Washington's peace proposal. The remarks raised fresh concerns over regional stability and its potential impact on global oil flows.

Similarly, West Texas Intermediate (WTI) crude climbed close to the $100-per-barrel mark, also registering a gain of nearly 1 per cent. Analysts note this is the third consecutive session in which geopolitical commentary from Washington has directly moved crude benchmarks.

OPEC Output Declines Sharply in April

Compounding the supply-side pressure, reports indicate that crude output by OPEC declined by 830,000 barrels per day in April, bringing the group's total production to 20.04 million barrels per day. The drop adds to the tightening supply narrative that JPMorgan's report underscores, and comes at a time when demand signals from Asia remain relatively firm.

Impact on Indian Markets

Elevated global energy prices have also fed through to domestic financial markets. India's benchmark equity indices — the Sensex and Nifty — came under sharp pressure, declining by around 1 per cent, reflecting investor concern over the implications of sustained high oil prices for India's import bill, inflation, and corporate margins. India imports over 85 per cent of its crude oil requirements, making it acutely sensitive to prolonged price elevation.

With OPEC supply constrained, logistical bottlenecks entrenched, and US-Iran diplomacy showing no clear resolution, energy markets appear set for a prolonged period of elevated prices — keeping pressure on oil-importing economies well into 2026.