Oil prices still face upside risks! JP Morgan joins the bullish camp on Wall Street: Focus on progress in the Strait of Hormuz restoration.

Multiple investment banks have pointed out that as tensions in the Middle East have eased, the pricing logic of international oil prices is undergoing a transformation - the market focus is shifting from the conflict itself to the progress and pace of resuming transportation in the Strait of Hormuz. Although the ceasefire has provided a window for supply recovery, there is still uncertainty in restarting the shipping lanes. If the recovery process is slower than expected, the upward risk for oil prices is increasing. Against this backdrop, international oil prices have fallen from the previous high of nearly $120 but are still hovering around $100 per barrel. JPMorgan Chase stated that the current market pricing has factored in the expectation that the transportation in the Strait of Hormuz will recover quickly in the coming months, including half of normal flow being restored in May and full recovery in June. However, the bank warned that if the recovery process is slower and not until July returns to pre-war levels, there could be an upward risk of $15 to $20 per barrel for oil prices, pushing futures prices to retest the high of nearly $120 in mid-March. The conflicts in the Middle East had once led to the almost complete closure of the Strait of Hormuz. Although the US and Iran have reached a temporary ceasefire arrangement and plan to negotiate on follow-up issues, the resumption of navigation still faces uncertainty. Currently, there are still a large number of vessels stranded in the waters of the Persian Gulf. Analysts estimate that as of April 9th, about 346 energy-related vessels are stuck in the region, with 241 vessels already loaded with cargo. These vessels carry a total of approximately 104 million barrels of crude oil and condensate, 1.3 million tons of liquefied natural gas, and 5.5 million barrels of liquefied petroleum gas. The Strait of Hormuz, north of Iran, is a key passage connecting the Persian Gulf with global markets and normally accounts for about one-quarter of global seaborne oil trade. In this context, analysis from other institutions also shows that sensitivity to the "resumption pace" of oil prices is increasing. Goldman Sachs predicts that in a scenario where shipping gradually resumes within a month, the average price of Brent crude oil in the third and fourth quarters will be $82 and $80 respectively. However, if the recovery is delayed, the oil price could return to above $100 per barrel, and in extreme cases, even close to $120. Bank of America Securities has raised the benchmark price of Brent crude oil to $92.5 for the year and pointed out that if the conflict lasts longer or energy infrastructure is damaged, oil prices could rise further. Based on historical estimates, if a major supply interruption continues, oil prices could even rise to the range of $150 to $200 in extreme situations. Overall, although there are differences in the central price judgments among various institutions, their analyses are tending towards a consensus: the progress of resuming the Strait of Hormuz and whether there are new disruptions in this process will be the key variables determining the direction of oil prices. The current oil price level near $100 reflects the market's expectations that supply will gradually recover in the short term. However, in the background of the shipping lanes not fully restored and the region still facing recurring risks, this expectation itself remains fragile. Washington and Tehran are expected to hold talks this weekend, with the condition of the shipping lanes being a focus for both sides, and the outcome of the negotiations will also be the next focus for the market. In general, this week is a crucial period for the transition of oil prices from "war logic" to "logistics and diplomatic logic". $100 is not just a price point, but also a fragile balance line between the tight supply in the global energy market and the expectation of a ceasefire.