JPMorgan Abandons Oil Price Forecast Amid Ongoing Iran Conflict

JPMorgan Chase has lost its baseline view on oil markets due to the ongoing conflict between the US and Iran. The bank's analysts stated that they no longer know how to model the endgame for the conflict, which has led to a surge in oil prices.

The price of oil has climbed above $100 per barrel, with analysts at JPMorgan estimating its fair value at around $90 per barrel for September. This suggests that markets are pricing in the risk of additional supply losses beyond the estimated 10 million barrels per day already disrupted.

The bank pointed to mounting risks across the Middle East, including threats to shipping through the Bab el-Mandeb Strait and recent attacks affecting Saudi export routes. The conflict has also led to a significant decline in global inventories of crude and refined products, with a total fall of about 555 million barrels since its beginning.

The situation is particularly concerning as winter approaches, which is typically a period of peak seasonal demand for energy. US diesel prices have hit an all-time high of $6.31 per gallon, while oil prices are near $106 per barrel.