Oil Prices to Remain Elevated Through Q2 Amid Iran Conflict, Westpac Warns
Oil prices are expected to stay high through the second quarter as the Iran war continues, with traders fearing infrastructure damage could sideline barrels for months even after hostilities end.
Key Points
- Oil prices expected to remain high through Q2 2026 due to Iran conflict
- Iran rejected latest 45-day ceasefire proposal, demanding permanent cease-fire and sanctions lift
- Traders fear infrastructure damage could keep barrels offline for months after conflict ends
- JPMorgan's Dimon warns war may push inflation and rates higher
Full Details
Westpac analysts warn that the ongoing Iran conflict will keep oil prices elevated through Q2 2026. Attacks on energy and shipping assets continue, and traders fear that even if the war ends, damage to infrastructure could sideline barrels for months, not days. Hopes for a deal soured after Iran rejected the latest proposal to end hostilities for 45 days and asked for guarantees for a permanent cease-fire, lifting of sanctions, and a new arrangement for governing the Strait of Hormuz. President Trump has warned that failure to secure an Iran deal could have catastrophic consequences, stating 'a whole civilization will die tonight' if Iran doesn't make a deal. JPMorgan's Dimon has warned the Iran war may push inflation and rates higher. Kevin Hassett, former NEC director, urged state governments to take additional steps to lower oil prices.
Why It Matters
Prolonged elevated oil prices could reignite inflation concerns and complicate Federal Reserve rate decisions, potentially delaying interest rate cuts and increasing pressure on consumers and businesses already facing economic uncertainty.
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