JP Morgan Drops Oil Baseline as Brent Stays Above $100 in US-Iran War
Updated
Updated · BBC.com · Sep 18
JP Morgan Drops Oil Baseline as Brent Stays Above $100 in US-Iran War
3 articles · Updated · BBC.com · Sep 18
Summary
JP Morgan told investors it no longer has a baseline oil-price forecast, saying six months into the US-Iran war it "simply" cannot model the conflict's endgame.
The bank had expected economic pain to force a deal reopening the Strait of Hormuz, but oil has climbed back above $100 a barrel and 10-year Treasury yields have moved past 5%.
JP Morgan still pegs September oil "fair value" near $90, yet says markets are pricing in wider supply disruption as no clear signs of de-escalation emerge.
Middle East shipping risks have deepened with Iran-backed Houthis seizing an area near the Bab al-Mandab Strait, while the Russia-Ukraine war continues to strain supply.
Higher energy costs are feeding inflation ahead of colder months, helping prompt the Federal Reserve's first rate increase in more than three years as Trump predicts oil will fall only after November's midterms.