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JPM thought countries would stop production in weeks. It’s happening much faster.
The table below from JPM research was their best attempt at estimating how many days it would take for a de facto Hormuz closure to trigger a halt in energy production across Middle East countries.
The idea is simple: if I can’t ship my production through the Strait, and my storages are getting full, I am forced to stop production altogether.
And when I do that, disruptions become much bigger - restarting production can take months even after (when?) the eventual resolution happens.
JPM thought Kuwait would start halting production 14 days after the conflict started, but they have capitulated in 7 days only.
If this becomes a trend, energy disruptions would kick in faster and at a larger scale than previously thought.
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