If Israel-Iran tensions escalate, crude oil prices could spike to $120, warns J P Morgan

As tensions escalate between Israel and Iran, J P Morgan suggests  the oil prices could surge to $120 a barrel. 

As per reports, the oil prices may reflect in the low-to-mid $60s through 2025 and $60 in 2026, but in certain worst-case scenarios could send prices surging to double those levels.

“Intensification of Middle East tensions now has investors on edge, with Israel launching attacks on Iran’s nuclear and military facilities, while Iran vowed retaliation,” said JP Morgan on June 13.

According to the American multinational finance corporation, Iran supplies about 4% of global oil, but the bigger concern is a potential conflict spillover affecting the Strait of Hormuz, a vital route for 20% of the world’s crude. 

With the Middle East producing a third of global oil, any escalation could disrupt energy supply, push up prices, and complicate central banks’ efforts. However, inflation remains on a downward trend, and oil prices are still 10% below January highs despite recent spikes.