Oil Markets Weekly: A reboot without China

Research evidence excerpt

Oil Markets Weekly: A reboot without China

J P M O R G A N Global Markets Strategy

02 July 2026

Oil Markets Weekly

A reboot without China

Crude oil prices are back at near pre-war levels, as if more than 100 days of conflict Global Commodities Research

that shut one of the world’s most important shipping lanes and triggered the largest Natasha Kaneva

oil supply shock in modern history never happened (Figure 1). Much like a (1-212) 834-3175

computer after a major crash, the oil market is attempting a system reboot. But natasha.kaneva@jpmorgan.com

rebooting a complex system is rarely instantaneous. Memory lingers. Processes Lyuba Savinova

restart unevenly. Temporary files accumulate. And before stability returns, the (1-212) 270-3781

system must first sort through the residual chaos left behind by the shock. lyuba.savinova@jpmchase.com

Artem Fakhretdinov

That is precisely where the market finds itself today. (1-212) 272-1839

artem.fakhretdinov@jpmorgan.com

JPMorgan Chase Bank NA

Figure 1: Change in Brent crude oil price in the 123 days following select events

Percent

100% CONFLICT

START

80%

60%

40%

20%

0%

-20%

-40%

-15 -12 -9 -6 -3 0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81 84 87 90 93 96 99 102 105 108 111 114 117 120 123

Gulf War 1 Gulf War 2 Libyan Civil War Russia Ukraine Iran war

Source: Bloomberg Finance L.P., J.P. Morgan Commodity Research

The first stage of this reboot is mechanical. There is now a rush to move stranded

cargoes out of the Strait of Hormuz. Average crude exports from the Persian Gulf

plus re-routed volumes over the last ten days have already recovered to about 19

mbd, just 3 mbd below pre-war levels (Figure 2). The backlog is also disappearing