JP Morgan Uncertain About Oil Market Outlook Amid Prolonged Iran Conflict
JP Morgan has expressed uncertainty about the future of oil markets due to the ongoing conflict between the US and Israel over Iran. The bank noted that it no longer assumes economic thresholds will be respected by governments, as many have been crossed without a clear resolution in sight. Oil prices remain elevated at $106 per barrel for Brent crude despite not rising sharply as expected because of reduced reliance on inventory drawdowns. The firm highlighted geopolitical risks such as threats to shipping through the Bab el-Mandeb Strait and attacks affecting Saudi export routes, along with ongoing strikes on Russian refining infrastructure. Global oil demand has also fallen by 4.4 million barrels per day compared to last year, helping offset some supply disruptions. However, if Middle East supply issues persist, prices could rise further as inventories decline. Despite the current stability in crude prices—averaging $94 since the conflict began—JP Morgan warned that prolonged disruption may eventually lead to higher oil costs later this year.
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Topics: energy supply disruptions geopolitical risk JP Morgan analysis oil prices