JPMorgan's Middle East Scenarios - FJElite

1. 50% chance of further strikes, followed by a declaration that military action is over - then a 75% chance the US maintains a presence to secure Strait of Hormuz passage and continues the blockade and 25% it withdraws after declaring its mission complete. These two outcomes would be expected to see, respectively, Brent opening ~$3 higher on Monday but ending unchanged to $2 lower and prices near $90 longer term, and opening unchanged before falling ~$4 as positions are exited, before gradually recovering and $105-110 within a week.

2. 50% chance is that diplomacy is given more time - expected to see a $4-5 decline in prices and a 7-10 point fall in volatility through the week as the market reassesses the possibility of diplomacy and investors exit January length.