JP Morgan says it is struggling to forecast oil prices during the US-Iran war, according to the BBC, having assumed there would be economic red lines the US would be unwilling to cross.
JP Morgan has said it is struggling to forecast oil prices because of the war between the US and Iran, according to the BBC. In blunt terms, the bank summarised its position by stating that “we simply don’t know” where prices are heading.
The difficulty, as reported by the BBC, stems from the conflict introducing a level of uncertainty that complicates the bank’s usual modelling of the oil market.
Central to the bank’s thinking was an assumption about limits on how far conditions would be allowed to deteriorate. JP Morgan said it “assumed” there would be economic red lines that the US would be unwilling to cross.
One example of such a red line, according to the BBC’s reporting, was oil reaching $100 a barrel. The suggestion is that the bank had expected policy would work to avoid prices climbing to that level.
The acknowledgement is notable because banks like JP Morgan routinely publish price forecasts that investors, businesses and governments rely on for planning. An admission of uncertainty signals how unpredictable the current situation has become.
Beyond the points reported by the BBC, further detail on the bank’s specific projections or the timeline for any change in oil prices was not provided in the available sources.
Why it matters
Oil prices influence the cost of fuel, transport and goods for ordinary consumers, so heightened uncertainty can ripple through household budgets and business planning. When a major bank like JP Morgan says it cannot confidently forecast prices, it underscores how geopolitical conflict is destabilising markets.