J.P. Morgan Warns of "Economic Time Bomb" as Global Oil Reserves Near Depletion

COLOMBO (News 1st) -  Global Analysts have warned that the impact on global oil supplies will intensify throughout April, describing the situation as akin to an "economic time bomb." 

Citing a latest report from J.P. Morgan, the U.S.-based multinational investment bank, analysts say that the ongoing war has created a significant risk of depleting global oil reserves. 

The report notes that this crisis stems from disruptions to oil transportation through the Strait of Hormuz over the past month.

The J.P. Morgan report highlighted that Asian countries will be the first to face the risk of oil shortages due to the military climate, followed by Western nations toward the end of April.

Currently, nations are surviving on oil reserves already present at land. However, with the closure of the Strait of Hormuz disrupting new supplies via tankers, many countries face the imminent risk of their reserves running short. 

The report warns that the exact moment this "economic time bomb" explodes will depend on how long it takes for remaining tankers to reach their destinations. 

Consequently, April is expected to be the most critical month in world energy history.

Typically, it takes 10 to 20 days for an oil tanker to travel from the Gulf region to Asia. 

As this window closes, oil storage in Asian countries are emptying rapidly. 

The report identifies Asia as the region most severely affected by the Hormuz blockade.

Forecasts suggest a grim outlook for supply: By May it suggests Asian oil supply is expected to drop by 2 million barrels per day.

By June The supply could drop further by 3 million barrels per day.


Since February 28, the price of Brent crude has surged by 49%, hitting the $100 mark as of this afternoon. 

Meanwhile, WTI crude stood at $97 per barrel, and Murban crude reached $106.

Following Asia, the shortage is expected to hit the African continentand then the Europe. 

Analysts point out that Europe’s struggle will not just be a shortage of physical supply, but also extreme price hikes and intense competition with Asian nations to secure available oil.

If the conflict drags on until June, analysts predict a 40% probability that global oil prices could skyrocket to $200 per barrel. 

Such a spike would likely drive U.S. gasoline prices to $7 per gallon, dealing a devastating blow to the global economy.