JPMorgan Analysts Struggle to Model Oil Prices Amid Prolonged Iran War
More than six months into the war with Iran, JPMorgan Chase & Co. analysts have acknowledged that predicting its end—and consequently modeling oil prices—has become increasingly difficult. The conflict has already triggered economic red lines such as oil surpassing $100 a barrel and gasoline nearing $5 per gallon in the U.S., complicates any clear exit strategy. The bank estimates oil's fair value at around $90, while current prices hover near $106, suggesting markets are pricing in an additional 4 million barrels of daily supply loss. Analysts warn that without diplomatic progress or de-escalation from the U.S. and Iran—especially ahead of a key meeting between President Trump and Xi Jinping—the assumption of temporary disruption is hard to sustain. JPMorgan also notes dwindling global oil inventories, which could limit further price gains for now but warns prices may rise significantly in Q4 2026 if supply disruptions persist. The recent targeting of critical energy infrastructure like Saudi Arabia’s East-West pipeline has heightened concerns about ongoing supply tightness.
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Topics: energy infrastructure global economic growth Iran war JPMorgan analysis oil prices