Let alone traders, even Wall Street major JPMorgan has lost clarity on where oil prices are headed. For the first time since the Iran war erupted in February, the bank no longer has a clear baseline view for oil markets as escalating tensions fuel fears of an already worsening supply shock.
“We simply don't know how to model the endgame,” analysts at the bank said, highlighting the uncertainty surrounding how the conflict could ultimately unfold. At the start of the conflict, JPMorgan had assumed there were certain economic thresholds that the US administration would not cross. But six months into the war, many of those lines have been crossed, and there is still no clear exit strategy in sight, the bank said.
