The global oil supply crisis is moving from the warning stage into a substantive shock phase.
Natasha Kaneva, head of commodities at JPMorgan, clearly stated in her latest report that as the last batch of pre-blockade tankers is expected to arrive around April 20, &#34;pre-blockade inventory&#34; within the global supply chain will be completely exhausted, and the oil shock is now fully unfolding.
From March to early April, governments, businesses, and consumers worldwide collectively drew down 250 million barrels of reserves—equivalent to 6.6 million barrels per day—to cushion the impact of the supply gap. However, this buffer space is approaching its limit—even if refiners double their current production cut volumes, OECD commercial crude inventories may still fall to operational minimums by early May. The market is no longer absorbing shocks but consuming the final buffer while being forced to compress demand.
Spot Brent crude prices hit a historic high of $144 per barrel on April 7, surpassing the peak just before the 2008 financial crisis, while the June Brent futures contract traded at approximately $109 per barrel on the same day. The abnormal spread of over $35 between the two clearly reveals extreme tightness in immediate physical supply.
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<h2>Pre-Blockade Inventory Nearing Exhaustion; Time Window Extremely Limited</h2>
According to JPMorgan's calculations, the last tanker to pass through the Strait of Hormuz before the blockade departed on February 28 and is expected to arrive around April 20. This milestone marks the complete depletion of pre-blockade crude in the global supply chain, making the reopening of the strait the market's most urgent priority.
Despite a ceasefire agreement reached last week for two weeks, shipping traffic through the Strait of Hormuz remains at levels seen in early April. Iran continues tightening control through new transit rules, military threats, and informal fee mechanisms linked to the Islamic Revolutionary Guard Corps.
Meanwhile, political signals remain contradictory—the White House has hinted at considering a joint fee mechanism post-war while simultaneously announcing a US naval blockade of the strait. The UK government also confirmed that an armed group attacked a sailing vessel near the Yemeni coast on Sunday, indicating rising security risks.
<h2>Refinery Output Cuts Fall Short of Expectations; Inventory Drawdown Becomes Primary Buffer</h2>
JPMorgan had originally anticipated large-scale refinery output cuts outside the Middle East, but reality proved contrary to expectations. Asian refiners, facing both crude shortages and seasonal maintenance, collectively cut output by about 2 million barrels per day—far below projections.
In this context, the missing daily supply of approximately 13 million barrels from the Persian Gulf was primarily filled through two methods: massive drawdown of inventory reserves and forced demand contraction due to increasingly difficult fuel availability. JPMorgan estimates that between March and early April alone, global reserves have cumulatively been drawn down by 250 million barrels.
Looking ahead, if refinery output cuts rise from the current ~2 million barrels per day to 3 million in April and nearly 8 million by May, commercial inventories might sustain until late May. However, this buffer space is extremely limited, and the system has entered a mandatory rationing phase.
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<h2>Shockwaves Spread Globally; Energy Supply Emergencies in Multiple Regions</h2>
The impact of this supply disruption has already manifested across multiple regions globally.
In Asia, which relies on Persian Gulf oil for approximately 80% of its needs, cargo shipments from the region effectively ceased delivery starting April 1, with only minimal volumes still passing through—accounting for roughly 6% of pre-war import levels. The Philippines, where imports from the Middle East comprise about 96% of total oil consumption, was the first to declare a national energy emergency, with local gasoline prices more than doubling. Indonesia and Vietnam have mandated work-from-home arrangements and implemented energy rationing. Thailand's fishing industry faces shutdown due to marine fuel costs surging over 250%, a sector contributing approximately 0.8% to Thailand's GDP. India has suspended commercial liquefied petroleum gas (LPG) supplies to ensure household needs. Public buses and ferry services in many Japanese cities have reduced frequencies due to fuel shortages.
In Europe, most cargo from the Persian Gulf is expected to have stopped deliveries around April 10. The UK received its last shipment of jet fuel from Saudi Arabia on April 7, while approximately 50% of the UK's jet fuel depends on Middle Eastern imports. Four major Italian airports have been forced to implement rationing due to jet fuel shortages. The European Airports Association warned that if the Strait of Hormuz does not reopen within three weeks, Europe will face widespread jet fuel shortages.
Australia has reduced refining capacity by approximately 70% since 2009 and currently relies on imports for about 80% of its fuel demand. The last shipment is expected to arrive on April 19, prompting the government to activate fuel reserves and launch a national fuel security plan. The US sits at the tail end of this shockwave, with most shipments expected to cease around April 15. The final crude oil shipments arrived in Texas and California on April 1 and April 8, respectively.
<h2>Spot-Futures Spread Hits Historic Anomaly</h2>
Historically, the spread between spot Brent crude and near-month ICE Brent futures contracts typically ranged from $1 to $2 per barrel, reflecting smooth arbitrage mechanisms between physical and paper markets.
However, on April 7, spot Brent reached $144 per barrel while the June delivery futures contract traded at approximately $109, creating a spread exceeding $35—far beyond historical norms. JPMorgan noted that this abnormal spread indicates the market is struggling to secure immediate physical delivery, even though it still expects supply to eventually normalize.
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Kaneva concluded in her report that the strong performance of spot Brent reflects the market signaling via price that &#34;time itself has become a scarce commodity.&#34; For investors, this means physical supply tightness in the short term may be far more severe than what the futures curve suggests, and the timeline for inventory exhaustion is rapidly approaching.

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JPMorgan warns that the shock from a Strait of Hormuz blockade has entered its most dangerous phase—the last pre-blockade tankers are due to arrive on April 20, and global buffer inventories are nearing zero. Since March, countries have drawn down 250 million barrels of reserves, and OECD commercial stocks could hit operational minimums by early May. Spot Brent prices surged to a historic high of $144 per barrel, with a futures spread exceeding $35, revealing extreme physical supply tightness

- Global oil supply is transitioning from warning to crisis, with significant shortages expected as reserves deplete by April 20.  
- JPMorgan reports that 250 million barrels have been withdrawn from global reserves to offset supply gaps, while Asia and Europe face urgent energy shortages due to disrupted deliveries.  
- The price gap between spot Brent crude and futures has reached historic levels, indicating extreme tension in the market, as investors anticipate continued tight supplies.

Inventory Running Out! JPMorgan Warns: Full-Blown Oil Shock Imminent