JPMorgan oil team gives up on forecasting Iran war endgame as Trump blows past economic redlines
JPMorgan assumed at the start of the war that several economic redlines would force President Donald Trump into an agreement to open the Strait of Hormuz.
TL;DR
- JPMorgan has stopped forecasting the end of the Iran war, citing an inability to model the conflict's conclusion.
- Economic 'redlines' like oil above $100 and gas near $5 per gallon, which were expected to prompt a resolution, have been crossed without yielding an agreement.
- The conflict has escalated, with a drone attack damaging Saudi Arabia's East-West pipeline and advancements by Houthi militants impacting tanker traffic.
- President Trump is facing a significant decision regarding potential escalation or de-escalation of combat operations against Iran.
- Despite high prices, oil inventories are sufficient to buffer a prolonged disruption, preventing immediate price containment issues.
- Ukraine continues to strike Russian refineries, contradicting claims of an agreement to halt attacks on energy facilities.