'We simply don't know' - JP Morgan struggling to forecast oil prices due to Trump's war with Iran

September 18, 2026

Investment banking giant JP Morgan has publicly acknowledged its inability to forecast oil prices amid the ongoing US-Iran conflict, admitting in an unusual note that it cannot "model the endgame. " The bank initially expected the Trump administration would reach a deal to reopen the Strait of Hormuz by June, assuming certain economic thresholds—including oil above $100 per barrel and 10-year Treasury yields hitting 5%—would act as red lines preventing escalation. However, these thresholds have now been crossed without any clear resolution, leaving analysts without a baseline forecast for the first time since the conflict began.

Who is affected

JP Morgan and its investors who rely on the bank's forecasting for investment decisions
American consumers facing high gasoline and energy prices
Global populations experiencing rising cost of living due to fuel and energy price surges
The Federal Reserve and Fed Chair Kevin Warsh dealing with inflation management
President Donald Trump and his administration
Financial markets and investors making decisions based on inflation expectations
International shipping using the Strait of Hormuz and Bab al-Mandab Strait

What action is being taken

The Federal Reserve raised interest rates this week (the first increase in over three years)
The Federal Reserve is signaling potential further rate increases through 2026 and into 2027
Yemen's Houthis are seizing an area at the mouth of the Bab al-Mandab Strait
Oil is currently trading above $100 per barrel

Why it matters

This situation matters because oil prices are a major driver of global inflation, affecting the cost of living worldwide due to the commodity's widespread use and humanity's dependence on it. The inability of a major investment bank like JP Morgan to forecast economic outcomes creates significant uncertainty for investors who base critical investment decisions on inflation expectations and oil price predictions. The crossing of what were assumed to be economic "red lines" without any de-escalation signals represents unprecedented territory that could lead to prolonged economic instability, higher borrowing costs, and continued inflationary pressure on consumers globally.

What's next

President Trump stated he does not expect the Iran war to end until after November's midterm elections, predicting that oil prices will tumble downward "right after the election" and that resolution will "take a little bit longer than the midterm."

Read full article from source: BBC