Nine weeks into the Iran war, the global economy continues to lose record volumes of oil supply — yet prices have remained relatively contained and well below all-time highs. Those prices could soon change as "something is off" in the math, according to JPMorgan oil strategists.
In commodities markets, the arithmetic required to balance the market is straightforward. Supply plus inventory withdrawals equals consumption plus inventory builds.
In simple terms: How much oil is available in storage, and how much of that capacity is getting used up?
"Commodities markets are always forced into equilibrium: the market must clear," the JPMorgan strategists, led by head of global commodities strategy Natasha Kaneva, wrote. "If production falls short of demand, the gap can't persist."
Read more: How oil price shocks ripple through your wallet, from gas to groceries
As of late April, the disruption to global supply has reached 13.7 million barrels per day (mbpd), according to JPMorgan, or nearly 15% of the world's demand of roughly 100 mbpd.
There are only a few levers to pull in a disrupted market. The first answer is often spare production capacity, with producers ramping up to backfill losses. Yet the lion's share of global spare capacity is located in the Persian Gulf region, where the closure of the Strait of Hormuz has sent exports to near-zero. In the US, an addition of 1 mbpd of extra capacity can take six to 12 months to come to market, JPMorgan noted.
The second primary lever is inventories. The inventory lever was "activated almost immediately." Inventory draws reached an "extraordinary" 7.1 mbpd in April as nations tapped into their strategic reserves to prevent massive spikes in price, JPMorgan’s strategists wrote.
In March 2026, the International Energy Agency coordinated a record 400 million barrels of oil stock release from its 32 members. Global oil stocks are now likely to fall to all-time lows even if the Strait of Hormuz were to reopen by the end of April, according to research from Goldman Sachs.
Global visible oil stocks are likely to fall to all-time lows even if the Strait of Hormuz reopens by late April, according to Goldman Sachs. · Goldman Sachs Global Investment Research
Yet, even with spare capacity constrained and inventories nearing record lows, prices aren't at all-time highs.
Futures prices are up roughly 40% since the start of the war on international benchmark Brent crude (BZ=F) and US benchmark West Texas Intermediate (WTI) crude (CL=F). Even at their intraday highs during the war — $118.35 per barrel on Brent, and $112.95 on WTI — the contracts are still off their 2008 records by roughly $20 per barrel.