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JPMorgan Abandons Oil Forecast as Iran War Exhausts Strategy

Six months into the conflict, JPMorgan says it has no baseline view for oil prices—a first. Multiple economic red lines have been crossed, leaving markets without a clear exit strategy.

JPMorgan's commodities team abandoned its oil price forecast Thursday for the first time since the Iran war began, stating bluntly: they cannot model the endgame. Strategists led by Natasha Kaneva told clients that the bank assumed certain "economic red lines the US administration would be unwilling to cross"—including oil above $100 per barrel, gasoline prices nearing $5, and 10-year Treasury yields exceeding 5%. Six months into the conflict, all have been breached, yet no clear exit path has emerged. Brent crude is trading near $106 per barrel, roughly $16 above JPMorgan's estimated fair value, suggesting markets are pricing in catastrophic supply losses. The widening supply crisis has multiple pressure points. The Strait of Hormuz, which once saw over 120 daily tanker transits, now sees fewer than 12—a 95% collapse. Saudi Arabia's East-West pipeline, carrying 4-5 million barrels per day and serving as the primary bypass route, was shut indefinitely after a drone attack attributed to Iran-backed Iraqi militias. Iran-allied Houthis have tightened control of the Red Sea and captured strategic positions at the Bab al-Mandeb Strait, further constraining alternative export routes. Meanwhile, Trump told Axios Thursday that he faces an imminent "big decision" on whether to restart massive military operations against Iran or seek an exit. The decision comes ahead of a planned meeting with six Gulf leaders at the UN General Assembly, where he will seek buy-in from regional allies on the war's next phase. Trump's comments arrive with midterm elections roughly 50 days away, adding domestic political pressure to an already volatile equation.