Rising tensions in the Middle East and scenarios related to Iran have raised JP Morgan's warnings about the oil market. The bank notes that in exceptional conditions, prices can reach $130. Fragility has made the ceiling.
JPMorgan: Oil Could Rise to $120—130 in Iran-Triggered Scenario
According to a new analysis from JPMorgan, the price of Brent oil in the coming period will remain between $60—70 in the base scenario. But the worst-case scenario with Iran could double prices to $120—130.
The analysis noted that oil prices already include a geopolitical risk premium, with Brent hovering around $69 and including a risk premium of about $4. If Iran's exports of 2.1 million barrels per day are cut, the closure of the Strait of Hormuz, a critical crossing point for the Persian Gulf, or large-scale retaliatory operations could lead to a rapid rise in prices.
With tensions in the Middle East rising, the withdrawal of U.S. personnel in the region and the announcement by Iran's defense minister that U.S. bases could be attacked if nuclear talks fail reinforced the growing perception of risk. These developments have reshaped expectations, increasing fragility in the oil market.
JPMorgan's strategic stance predicts that prices could be reached in the low-mid $60 band throughout 2025, while in the most extreme Geopolitical risk scenario, $120—130 levels could be reached. This raises the issue of repositioning commodity portfolios and the energy sector.
📊 Geopolitical Risk and Price Prospects in the Oil Market
At the heart of the prospects are regional and strategic developments that threaten the security of oil supply. Iran's nuclear program and escalating tensions with the United States add uncertainty to supply forecasts. JPMorgan presents reasonably balanced market data in the base case, while noting the risk of volatility in prices in shock situations.
🌍 Middle East Geopolitics and Energy Security Context
The impact of tensions in the Middle East on the energy supply chain is too critical to detail. The shutdown that could occur in the Strait of Hormuz could damage the security of the structure, which could have a domino effect on global oil transportation. This could deepen demand for petroleum-based instruments.
📉 Risk-Return Balance for Investors
The current perception of risk for investors can create a sense of fragility in portfolios. While the $60—70 range seems reasonable in the medium term, the high risk scenario makes it tempting for portfolios to take energy-weighted positions. This, in turn, redefines the dynamics of valuation and expected volatility.
🧠 Expert Review
Although the base case for medium-term investors in the oil market seems to be balanced, they are advised to diversify their holdings by diversifying their assets and reviewing commodity or energy-oriented positions in the event of potential supply shocks; a window of opportunity may open up in the event of potential supply shocks.
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🛑 Disclaimer
This content is created by Investment Desk AI and does not constitute investment advice. You should make your decisions based on your own research and expert advisors.
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