JPMorgan: The risk of a "major calculation error" on the part of Trump could raise oil to $ 90

Markets have recently responded to the escalation of the trade war between US President Donald Trump and China with a shrug of the shoulders. JPMorgan analysts are beginning to find this disturbing.

"The resilience of the US economy and stock markets" will embolden the president on all geopolitical fronts – the automobile, NAFTA and especially Iran, "they wrote in a note of September 21. The result is a risk of "major miscalculation of sanctions difficult to calibrate".

New US sanctions against Iran are expected to come into effect on Nov. 4, and JPMorgan believes Trump could impose a tougher line on them than in the past. This could result in a larger than expected decline in Iranian oil exports.

"With the United States being more geopolitically aggressive and less likely to grant waivers, we are now modeling a loss of 1.5 million barrels a day," the bank said.

The risk of miscalculation has pushed JPMorgan to improve its forecast of oil prices for the coming quarters. The bank is now expecting Brent to reach $ 85 a barrel over the next six months, compared to a previous forecast of around $ 60 a barrel. A "peak" at $ 90 a barrel is likely, they said.

"The main driver of this revision is a higher estimate of the decline in Iran's crude exports due to several countries' compliance with US sanctions, which is expected to come into effect on November 4," said JPMorgan.

Meanwhile, JPMorgan said the ongoing trade dispute between the US and China seemed "disruptive in the medium term".

The latest round of tariffs on Chinese imports came into effect shortly after midnight on Monday morning in Washington. The duties were on imports worth $ 200 billion, ranging from agricultural products such as fruits to consumer goods such as furniture and industrial products such as chemicals. China has promised to meet tariffs on US imports worth $ 60 billion.

JPMorgan analysts said Friday in the report: "It has always been difficult to establish with certainty the extent of trade disputes, so we estimate that this week's market movements indicate that investors were expecting more."