Investment banking giant JP Morgan has said it is struggling to predict how oil prices will be impacted by the US-Iran war, telling investors in a rare note that "we simply don't know how to model the endgame".
The bank said it assumed at the start of the conflict that there would be "economic red lines" that the Trump administration would be unwilling the cross, and therefore it believed a deal would have been struck to open up the Strait of Hormuz shipping lane back in June.
It said such red lines included oil prices rising above $100 a barrel, inflation reaching 4%, gasoline topping $5 a gallon and rates on 10-year government borrowing hitting 5%.
"The market is on edge," analysts said.
JP Morgan is a huge name in the financial world, so for the investment bank to admit its experts are grappling with working out the economic impact of the US-Iran conflict reflects the tricky nature of trying to predict President Donald Trump's next moves.
An oil and gas industry source told the BBC it was "unusual" for such a high-profile investment firm to issue such a note, but added it was a "reflection on the state of play", given the uncertainties around the conflict.
Investors often make investment decisions on inflation expectations and the price of oil is a major factor in prices rising across the world, given the commodity's widespread use and humanity's dependence on it.
While gasoline remains below $5 and inflation has also not reached 4%, oil prices have surged back above $100 in recent weeks and the interest rate - known as a yield - on government bonds, which are issued in order for the US to borrow money from financial markets, has ticked over 5%.
"Six months later [since the war began], many of those lines have been crossed, yet the exit strategy is less clear, not more," said the commodities research team at JP Morgan in note.
"For the first time since the start of the Iran conflict, we don't have a baseline view. We simply don't know how to model the endgame."
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US President Donald Trump said last week he did not think the Iran war would end until after November's midterm elections in the US.
"Right after the election, oil prices are going to be tumbling downward," Trump told reporters last week. "I think it's going to take a little bit longer than the midterm."
High oil prices have been behind the rising cost of living in the US and around the world, with fuel and energy prices surging ahead of the colder months.
The US central bank, the Federal Reserve, raised interest rates this week for the first time in more than three years and signaled they could be increased further this year and into 2027 in an effort to slow rising prices.
Fed Chair Kevin Warsh said the move was because "inflation is too high and has been for too long", though Trump disagreed with the decision.
'No clear signs of de-escalation'
In JP Morgan's note, analysts said it estimated the "fair value" for oil in September would be around $90 a barrel, despite it trading above $100.
But it said "the market is pricing in the risk" of more disruption to trade.
Analysts cited further risks to oil supply in the Middle East, with Yemen's Houthis, which are backed by Iran, seizing an area at the mouth of the waterway in the Bab al-Mandab Strait, which is another key international shipping route.
The conflict between Russia and Ukraine also continues to have an impact.
Analysts said with "no clear signals" of the war de-escalating, the assumption that global oil supply disruption was temporary is "becoming increasingly difficult to sustain".
