Investing.com — J.P. Morgan reshuffled its European oil and gas ratings Thursday after Iran declared the Strait of Hormuz closed, threatening roughly 30% of seaborne crude and 20% of global LNG supply and prompting the brokerage to lift its 2026 Brent assumption by $10 to $72/bbl.
The brokerage upgraded to “overweight” from “neutral” and to “neutral” from “underweight,” maintained “overweight” on , and kept at “neutral,” raising price targets across the four names by an average 21%.
Iran’s closure of the strait, a chokepoint for approximately 17% of global LNG flows, risks putting up to 23% of global LNG supply at risk.
J.P. Morgan’s commodities team estimated supply losses could reach 3.3 million barrels per day by day eight of the closure and 4.7 million bpd by day 18.
Approximately 1.5 million bpd of Iraqi output had already been cut as of March 3. In a full Gulf production shutdown, Brent could reach $100-$120/bbl against approximately $81 at time of writing, the brokerage said.
TTF gas assumptions were set at $13/mmbtu for 2026 and $9.5/mmbtu for 2027. European gas storage sat near decade lows at approximately 18% full in Northwest Europe.
“The conflict materially shifts the near-term risk distribution for oil and gas prices, increasing the likelihood that a geopolitical risk premium persists even if physical disruptions prove temporary,” J.P. Morgan said.
Historical data in the note showed oil prices have risen approximately 30% on average in the three months following major producer unrest, with supply losses averaging approximately 23% over six months.
EnQuest received the sharpest target upgrade, to 25 GBp from 11 GBp, up 127%, against a closing price of 17 GBp, implying 47% upside.
The brokerage cited settlement of the Magnus contingent payment, securing 100% of Magnus cash flows and delivering an estimated 3p/share NAV uplift, alongside a November RBL refinancing.
EnQuest carries the highest oil price leverage in J.P. Morgan’s coverage, with an $85 million CFFO sensitivity per $10/bbl move. 2026 EBITDA is estimated at $508 million.
Var Energi, kept at “overweight” with a 44 NOK target against a 38 NOK close, offers 17% price upside plus an approximately 12% dividend yield. Its 2026 EBITDA is estimated at $8.82 billion, up 26%, with FCF of $2.58 billion, up 75%. The stock carries approximately 26% European gas exposure.
Aker BP’s target was raised 35% to 308 NOK from 228 NOK, against a 300 NOK close. Near-term FCF remains constrained by $6.52 billion in 2026 capital expenditure, with projects Yggdrasil and Valhall due online in 2027. 2026 EBITDA is estimated at $9.03 billion, up 22%.
Harbour Energy’s target rose 17% to 270 GBp from 230 GBp, against a 261 GBp close. The note flagged BASF’s stated intent to “gradually monetize” its 47% stake and rising net debt of $9.30 billion following the LLOG acquisition. 2026 EBITDA is estimated at $7.24 billion, up 22%.