#OIL

What could happen if the U.S.–Iran tension goes beyond 25 days?
According to JPMorgan’s mathematical calculation, the critical deadline is 25 days.
On the oil side, things don’t look good. If the crisis and disruptions in oil shipments last longer than 25 days, the current wait and see mood in the markets could give way to a structural crisis regime.
According to JPMorgan’s modeling, the buffer storage capacity held by Middle East oil producers is at a level that can cover a maximum of 22 to 25 days of production.
Asian countries are the biggest buyers of Middle East oil, and the 25-day window is a direct alarm level for these countries’ supply chains.
Even though countries like China have large strategic reserves, it’s estimated that big importers like India could tolerate only about 20–25 days of a full disruption with their current operational crude oil inventories.
For a fully loaded tanker departing the Middle East to reach distant Asian markets like Japan or South Korea takes about 20–25 days on average. If the Strait stays closed, it means the supply line goes completely dry after the ships already on the way arrive.
If it goes beyond 25 days
Importing countries may start making aggressive bids to find oil from alternative suppliers. Brent crude could quickly move above $100 per barrel.
As global routes shift to much longer distances like the Cape of Good Hope, freight rates for Very Large Crude Carriers and maritime insurance premiums spike.
Not only oil about 21% of LNG trade coming via Qatar also passes through this strait. Sudden energy shocks can raise global production costs, re ignite the inflation that central banks are trying to control, and increase recession risk.
Of course, to prevent the system from fully collapsing (as the 25-day threshold approaches), the U.S. or other major economies could aggressively release Strategic Petroleum Reserves to the market, or alternative Middle East pipelines could be brought online at full capacity to cool the price fire somewhat. But these moves can’t permanently solve a 20M-barrel per day logistical bottleneck.
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