JPMorgan Chase has abandoned its baseline forecast for how the Iran conflict will end, six months after hostilities began. Natasha Kaneva, head of global commodities strategy, said the bank’s original model assumed President Donald Trump would seek an agreement to reopen the Strait of Hormuz in June after oil exceeded $100 a barrel, gasoline neared $5 a gallon and 10-year Treasury yields surpassed 5%. Those thresholds have been crossed, but a June interim reopening deal collapsed within weeks as fighting intensified through September. Brent crude is near $105 a barrel, diesel is above $6 a gallon, seasonally adjusted gasoline prices are at records, and Strait of Hormuz traffic has fallen to the low teens from more than 120 vessels daily before the war. Damage to Saudi Arabia’s East-West pipeline, Houthi advances in Yemen and continued threats to shipping have added to supply risks, while Ukraine’s strikes on Russian refineries have widened the uncertainty. JPMorgan estimates Brent’s September fair value at about $90 a barrel, implying that prices reflect the risk of roughly 4 million barrels per day of additional supply losses beyond the 10 million barrels per day already disrupted. Oil inventories have fallen by about 555 million barrels, far below the bank’s initial projection of 1.4 billion to 1.6 billion barrels, partly because demand is more than 4 million barrels per day below year-earlier levels and U.S. output of crude and natural gas has reached records. The cushion is narrowing as inventories fall, Chinese demand accelerates and diesel margins encourage Chinese refiners to process more crude. With U.S. midterm elections less than 50 days away, Trump faces a decision over renewed combat or an exit and is scheduled to meet Chinese President Xi Jinping in Washington on September 24. JPMorgan said that without a diplomatic breakthrough, the assumption that Middle East disruptions are temporary will become increasingly difficult to sustain.