Stock is about to run out! JPMorgan warns: Oil shock will erupt across the board

```

The global oil supply crisis is moving from the warning stage to the stage of substantial impact.

Natasha Kaneva, head of commodities at JPMorgan, clearly pointed out in her latest report that as the last batch of oil tankers before the Hormuz Strait blockade is expected to reach its destination around April 20, the "pre-blockade inventory" in the global supply chain will be completely exhausted, and the oil shock is breaking out in full force.

Kaneva stated that from March to early April, governments, businesses, and consumers worldwide collectively tapped 250 million barrels of reserves, averaging 6.6 million barrels per day, to buffer the impact of supply gaps. However, this buffer space is near its limit—even if refiners double their current scale of production cuts, OECD commercial crude oil inventories may still fall to their operational minimums in early May. The market is no longer absorbing the shock, but rather consuming the last buffer while being forced to compress demand.

Spot Brent oil prices hit a historical peak of $144 per barrel on April 7, surpassing the pre-financial crisis levels of 2008, while the June delivery Brent futures contract was quoted at about $109 per barrel on the same day. This abnormal spread of over $35 between the two clearly reveals extremely tight conditions in the market for immediate physical supply.

Pre-blockade inventories about to be exhausted, time window extremely limited

According to JPMorgan's estimate, the last oil tanker passing through the Hormuz Strait before the blockade departed on February 28 and is expected to reach its destination around April 20. This time point marks the complete depletion of pre-blockade crude oil in the global supply chain. Reopening the strait has become the most urgent priority for the market.

Although a two-week ceasefire agreement was reached last week, shipping volume through the Hormuz Strait remains at the low levels seen in early April. Iran continues to tighten control through new transit rules, shows of force, and informal fees related to the Islamic Revolutionary Guard Corps.

Meanwhile, political signals are contradictory—the White House hints at considering a joint fee mechanism after the war, but also announces a US Navy blockade of the strait. The British government confirmed that an armed gang attacked a sailboat off the coast of Yemen on Sunday, and security risks continue to rise.

Refinery output cuts below expectations, inventory draw as main buffer

JPMorgan originally expected large-scale refinery output cuts outside the Middle East, but actual reductions fell short. Asian refiners, faced with crude shortages and seasonal maintenance, collectively cut output by about 2 million barrels per day, far less than expected.

Against this backdrop, the daily missing supply of about 13 million barrels from the Persian Gulf is mainly filled in two ways: large-scale reserve drawdowns and shrinking demand due to increasingly difficult fuel supply. JPMorgan estimates that in just March to early April, 250 million barrels of reserves have already been used globally.

Looking forward, if refinery output cuts rise from about 2 million barrels/day now to 3 million barrels/day in April and nearly 8 million barrels/day in May, commercial inventories may hold out until the end of May. But this buffer is extremely limited, and the system is now entering a forced allocation phase.

The shockwave spreads globally, multiple regions face energy supply emergencies

The impact of this supply disruption is already evident in several regions worldwide.

In Asia, where dependence on Persian Gulf oil is about 80%, deliveries from the Gulf have basically stopped since April 1, with only a small amount still moving, totaling about 6% of the region’s pre-war imports. The Philippines, with about 96% of its oil imported from the Middle East, has taken the lead in declaring a nationwide energy emergency, with local gasoline prices more than doubling. Indonesia and Vietnam have instructed their populations to work from home and implemented energy rationing. Thailand’s fisheries, which make up about 0.8% of GDP, are facing a shutdown as fuel costs for fishing boats have surged by over 250%. India has suspended commercial LPG supplies to safeguard residential needs. Public bus and ferry services in several parts of Japan have been reduced due to fuel shortages.

In Europe, most Persian Gulf cargo stopped delivery around April 10. The UK received its last batch of aviation fuel from Saudi Arabia on April 7, while about 50% of its aviation fuel relies on Middle Eastern imports. The four main airports in Italy have imposed fuel rationing due to aviation fuel shortages, and the European Airport Industry Association warns that if the Hormuz Strait is not reopened within three weeks, Europe will face widespread aviation fuel shortages.

Australia has cut about 70% of its refinery capacity since 2009, with roughly 80% of fuel needs relying on imports. The last batch of cargo is expected to arrive April 19; the government has tapped into fuel reserves and launched a national fuel security plan. The US is at the tail end of this shock, with most cargo deliveries ending around April 15, and the last crude shipments arriving in Texas and California on April 1 and April 8, respectively.

Spot and futures price spread hits historic abnormal levels

The spread between spot Brent crude oil and near-month ICE Brent futures contracts has historically been only $1–2 per barrel, reflecting the smooth operation of arbitrage between physical and paper markets.

But on April 7, spot Brent reached $144 per barrel while the June futures contract was only about $109, with a spread exceeding $35, far above historical norms. JPMorgan indicates this abnormal spread shows that the market is struggling to secure immediate physical delivery, despite expectations that supply will eventually normalize.

Kaneva summarizes in the report that the strength in spot Brent is the market signaling through prices that "time itself has become a scarce commodity." For investors, this means that near-term physical supply tightness may be much worse than what the futures curve reflects, and the deadline for depletion of inventories is rapidly approaching.

Risk Warning and DisclaimerThe market has risks; invest cautiously. This article does not constitute individual investment advice, nor does it take into account the special investment goals, financial conditions, or needs of any individual user. Users should consider whether any opinions, views, or conclusions in this article fit their specific circumstances. Invest accordingly and at your own risk. ```