Jake Pashelinsky of JPMorgan Chase's oil trading team believes the probability of a US-Iran agreement has fallen to its lowest level since the start of the war. There are two main possible paths forward:
1. The Strait of Hormuz remains a conflict zone, potentially extending even after the US midterm elections. Iran might reduce passage through the strait to break the US blockade.
2. The US ends the war and withdraws, allowing Gulf states to decide whether to pay passage fees. This would give Iran control over oil transportation and prices through the strait, allowing it to reap substantial revenue.
As long as oil prices remain stable, the easiest option for the US is to maintain the status quo. Only further increases in oil prices could force it to change its strategy. Meanwhile, continued US economic pressure on Iran is more likely to escalate than ease tensions. In the long run, higher oil prices, by suppressing demand and reducing global dependence on the region's energy, could alleviate this problem. (The above views are from a JPMorgan Chase report dated September 7th.)
