In their framework agreement to be signed on Friday, Iran and the United States have apparently left some key issues unresolved, said Berenberg.
Examples seem to include the dilution or disposal of Iran's highly enriched uranium, the Israel/Lebanon issue, some details of long-term sanctions relief for Tehran and, possibly, the precise arrangements for managing the Strait of Hormuz in the future.
However, chances are that both sides will want to avoid the pain of a new prolonged closure of the Strait of Hormuz, U.S. President Donald Trump probably even more so than Iran, noted the bank. A collapse of the deal, followed by a renewed surge in oil prices, could hurt Trump's Republicans badly at the midterm elections to Congress on Nov. 3.
The structure of the deal, with a 60-day period for further negotiations, should make it easy to simply extend the deadline further and further if the two sides cannot settle their differences in time.
Since late April, Berenberg has based its economic and financial forecasts on the assumption that the worst would be over by June. More precisely, the bank suggested that the price for dated Brent crude would fall from an average of US$120 per barrel in April to around US$90 in June and further to US$75 in January 2027.
Berenberg now seems to be on track for that. Futures prices have receded to be roughly in line with the bank's oil price assumption. As a consequence, it sees no need to revise its economic or financial forecasts.
For the last three months, Berenberg has argued that bond markets have overreacted to the surge in energy prices. Central banks won't tighten policy as aggressively as markets are pricing in.
Unlike in 2021 and 2022, when the combination of an ultra-loose monetary policy and a V-reshaped economic rebound from the pandemic had paved the way for a major surge in inflation even before Russian President Vladimir Putin had launched his full-scale invasion of Ukraine, the potential for major second-round effects from the spike in energy prices and transport costs is low, added the bank.