JPMorgan Chase has cautioned that Brent crude prices could rise to $120 per barrel if escalating conflict in the Middle East leads to a prolonged interruption of oil shipments through the Strait of Hormuz.

According to the bank’s assessment, Gulf oil producers would be able to sustain regular output for only about 25 days in the event of a complete blockage. After that, storage constraints could force production cuts, potentially resulting in a broader regional shutdown.

Crude prices climbed sharply following the killing of Iran’s Supreme Leader, Ali Khamenei, during a joint U.S.-Israeli military strike targeting missile facilities and senior leadership. The operation significantly heightened geopolitical tensions across the region.

By Monday morning, Brent crude had advanced 8.7 percent to $79.28 per barrel, while U.S. benchmark West Texas Intermediate rose 7.8 percent to $72.16.

In retaliation, Iran launched missiles and drones toward Israel and U.S. military installations in the Gulf, including bases in Bahrain and the United Arab Emirates, raising concerns of a wider regional confrontation.

Although the Strait of Hormuz has not been officially declared closed, vessel traffic has dropped by roughly 70 percent. Safety concerns, rising insurance costs and suspended shipping operations have effectively limited transit through the corridor.

Around 200 oil and LNG tankers have reportedly anchored or diverted away from the route. Major shipping firms such as Hapag-Lloyd and CMA CGM have paused voyages through the passage. War-risk insurance premiums have increased by as much as 50 percent, making shipments through the strait commercially challenging.

The Strait of Hormuz remains one of the world’s most vital energy arteries, carrying between 20 and 21 million barrels per day of crude oil and petroleum products. This volume represents roughly one-fifth of global oil consumption and nearly one-third of worldwide seaborne oil trade.