JPMorgan Abandons Crude Oil Price Forecast Amid US-Iran Conflict Uncertainty

JPMorgan's analysts have abandoned their baseline view of crude oil prices due to the ongoing US-Iran conflict. The bank acknowledges that they no longer know how to model the market, given the lack of a clear endgame in the war.

The uncertainty surrounding the outcome of the conflict has left traders struggling to predict oil prices. JPMorgan's analysts had previously assumed that certain thresholds would deter the Trump administration from further action, such as oil reaching $100 per barrel or gasoline hitting $5 per gallon. However, these thresholds have not been enough to halt the escalation.

Oil prices have generally stayed near $100 despite frequent disruptions, and JPMorgan's earlier forecasts proved substantially off the mark. The bank predicted that if disruptions to the Strait of Hormuz persisted into mid-May, oil could hit $150 per barrel. However, oil topped out at around $125 per barrel.

The International Energy Agency now expects world oil demand to decline by 2.5 million barrels per day in 2026, a drop of 940,000 barrels per day greater than the estimate in the August report.