How to predict oil price trends? JPMorgan Chase admits "we don't know."

The longer the war drags on, the harder it becomes to predict oil prices; even analysts at JPMorgan Chase are starting to say they "don't know."

More than six months after the outbreak of the war with Iran, a report from JPMorgan's oil analyst team led by Natasha Kaneva stated that the end of the war is becoming increasingly difficult to predict. "In our view, the market is in a state of high tension."

JPMorgan Chase had previously set several economic "red lines," believing that the U.S. government would not allow these situations to occur—including oil prices exceeding $100 per barrel, gasoline prices approaching $5 per gallon, and a sharp rise in U.S. Treasury yields.

But the reality is that all these red lines have been crossed. This makes it increasingly difficult for analysts to see a path out of the war. The report points out that "the assumption that supply disruptions are only temporary is becoming increasingly difficult to maintain."

What is the market pricing?

Current oil prices are around $106 per barrel, but JPMorgan estimates the fair value for September to be around $90.

What does the $16 difference between the two mean? Analysts believe that the market is pricing in an additional 4 million barrels per day of supply loss—a risk premium on top of the already disrupted 10 million barrels per day.

Although global inventory buffers have been depleted during the war, analysts believe that existing inventory is still sufficient to temporarily limit further significant increases in oil prices.

Key Nodes

The analyst pointed out a potential turning point in the report: September 24, a major diplomatic event between China and the United States.

Without clear de-escalation signals from either the United States or Iran—and if the September 24 meeting fails to yield a diplomatic breakthrough—the assumption that the supply disruptions are only temporary will become increasingly untenable.

This meeting is seen as one of the few diplomatic windows to observe the current situation.

JPMorgan Chase also provided a quantitative scenario: if Middle Eastern supply flows remain at current levels, oil prices in the fourth quarter could be about $7 higher than originally predicted, and in December 2026, oil prices could be about $8 higher—originally predicted to be about $80 and $78 per barrel, respectively.

Meanwhile, the recent attacks on key energy infrastructure in the Middle East, including Saudi Arabia’s vital East-West oil pipeline, have further exacerbated market concerns about tightening supply.

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