The question on Wall Street’s lips this week has been about Iran: When and how will the war end? President Trump issued some positive updates over the past 48 hours, though some analysts have pointed out there’s little verifiable action at present to support those claims. BlackRock CEO and cofounder Larry Fink sees the conflict ending in one of two extremes: Global powers accept Iran, and its goods and services (most important, its oil) are released onto the world market, pushing prices down. Or, the Iranian regime continues to stand at odds with global adversaries, and oil prices stay significantly elevated not for mere months, but for years.Wall Street has been determinedly upbeat about the war in Iran resolving in a relatively short window. Even the ever-skeptical Jamie Dimon, CEO of JPMorgan Chase, said he is a “little optimistic” about the long-term outcome of the current chaos in the Middle East.
Fink also wants to be hopeful, and outlined a best-case scenario: “I could paint a scenario where I could see, a year from now, oil at $40 a barrel; I could see it above $150. We have two very extreme outcomes,” Fink told the BBC this morning.
“Everybody has to recognize that there’s not going to come somewhere in the middle. It’s going to be [one] of two extremes: Is Iran a country that can be accepted by the international community? Can it be a country that participates in the world again?” Fink mused. Such an outcome could slash oil prices, flooding the market with supply currently choked by military threats in the Strait of Hormuz.
