Middle East Oil Prices Have Surpassed $150 Why Are Brent and WTI Calm? JPMorgan Warns: A Sharp Catch-Up Rally May Be Coming

TradingKey - Currently, Brent crude oil prices are hovering around $100, WTI crude oil prices remain above $90. Although lower than last week's peak which once neared $120, they have risen approximately 65% from the beginning of the year.

Crude oil volatility has been relatively flat so far this week, but JPMorgan's (JPM) Head of Commodities Natasha Kaneva and her team noted in a research report that the relative stability of Brent and WTI does not imply ample global supply. According to reports, Oman and Dubai crude oil futures have both exceeded $150.

JPMorgan pointed out that the current price stability is an illusion, manufactured by a combination of regional inventory buffers, distortions in benchmark pricing structures, and policy interventions.

Why are Brent and WTI prices stable?

The Financial Times reported that prices for various types of crude oil globally, from Norway to Kazakhstan, have soared as oil buyers scramble to find alternatives to Gulf crude. Oman crude futures hit a record high of $152.58 per barrel this Tuesday.

S&P Global Platts stated that the spot assessment price for Dubai crude for May loading reached a record $157.66 per barrel this Tuesday, surpassing the historical high of $147.50 for Brent futures set in 2008.

JPMorgan emphasized that while Brent and WTI are international benchmark crudes, they represent the "Atlantic Basin benchmark," with pricing determined more by local supply and demand in Europe and the U.S. rather than global conditions. This represents a clear misalignment with the disruptions in the Middle East.

Because commercial oil inventories in Europe and the U.S. were relatively sufficient at the beginning of 2026, and market expectations for a release from the U.S. Strategic Petroleum Reserve (SPR) have eased anxiety over shortages, Brent and WTI prices have been minimally affected by the disruptions.

As Middle Eastern benchmarks, Dubai and Oman crude prices directly reflect the difficulty of transporting oil from the Gulf, as they are squarely impacted by export disruptions.

Asia Bears the Brunt; Europe and the U.S. Yet to Be Impacted

Since the majority of crude oil transported through the Strait of Hormuz is destined for Asia, the impact of the supply disruption is most concentrated in the Asian market. According to JPMorgan data, prior to the outbreak of the Middle East conflict, a total of approximately 11.2 million barrels of crude oil and 1.4 million barrels of refined products flowed through the strait to Asia daily, with India, Japan, and South Korea as the primary buyers.

Currently, the tangible impact of oil disruptions has begun to spread to Asia. Refiners across the region have started to reduce run rates to conserve inventory. Some countries have banned exports of refined products, which may further tighten global markets in the future. Refined product prices have surged, with Asian jet fuel prices approaching $200 per barrel, near the historical high of approximately $220 reached earlier this month.

To cope with the energy crisis triggered by the Middle East conflict, ASEAN countries such as Thailand, Vietnam, and the Philippines are encouraging the use of electric and hybrid vehicles; Malaysia's Ministry of Education stated it would convene to discuss remote work and online teaching measures.

JPMorgan noted that the extent of the impact on Asia and Europe differs, partly because the time lag in crude oil transportation has led to price differentials. A typical voyage from the Gulf to Asia is about 10-15 days, while shipping to Europe via the Suez Canal takes 25-30 days, or 35-45 days if rerouting around the Cape of Good Hope. This means Asia feels the shock earlier, while the Atlantic Basin markets represented by Brent and WTI have a longer buffer period.

JPMorgan: Stability in WTI and Brent Prices is Only Temporary

JPMorgan pointed out that the impact of the current crude disruption crisis will not stop at Asia. Once the depletion of commercial oil inventories in Europe and the U.S. accelerates, the market will face even tighter supply, at which point Brent and WTI prices will catch up, closing the current gap of about $50 to align with Middle Eastern oil prices.

Morgan Stanley (MS) data shows that before the outbreak of the Russia-Ukraine war, Russia, as one of the world's largest oil producers, accounted for approximately 30% of Europe's crude oil imports and one-third of its refined product imports, totaling about 3-4 million barrels per day. At the time, market fears that Europe would lose Russian supply pushed Brent to a high of $130, even though the disruption did not actually occur.

In the current situation, the blockade of the strait has resulted in a global daily loss of 11-16 million barrels of crude oil supply, more than three times the volume during the Russia-Ukraine war. Using oil prices from the Russia-Ukraine period as a reference, current oil prices still have room for a catch-up rally.

Furthermore, even if the Strait of Hormuz were to reopen immediately, it would still take weeks or even months to restore crude oil flows, given the production capacity that has already been shut down in the Middle East.