BCA Research's macro and geopolitical strategist Marko Papic has cautioned that markets are underestimating both the severity and potential duration of the current tensions involving Iran. In a recent interview, Papic stated that the market reaction has been insufficient, as the conflict is likely to persist for a considerable period. He believes the oil market is displaying dangerous complacency, even with recent increases in spot oil prices, and that a significant price surge will be necessary to resolve the crisis. Papic forecasts that oil prices would need to reach $120 to $130 per barrel and expressed concern over the widespread risk complacency evident in both equity and oil markets.

The strategist outlined the possibility of a severe U.S. military response, noting that former President Trump has signaled a willingness to conduct punitive airstrikes against Iran. Papic argued that anyone assuming Iran could sustain a long-term blockade of the Strait of Hormuz is making a major assumption—such a stance would imply the Iranian regime is "willing to turn the entire country into a parking lot over the next six months." Despite Iran's aggressive public rhetoric, Papic pointed to signs that Tehran may be seeking de-escalation behind the scenes. He indicated that Iran is engaged in backchannel negotiations with multiple countries and has been ambiguous about fully closing the strait. Reports also indicate that some Indian-flagged tankers have been permitted passage through the contested waterway.

Drawing a historical parallel, Papic reminded investors of the 1980s Tanker War between Iraq and Iran. During that conflict, the U.S. Navy collaborated with other nations, including the Soviet Union, to successfully clear mines and establish a naval escort system. Papic framed the resolution of the current crisis as a "mathematical equation," weighing Iran’s capacity to endure against the world’s ability to clear mines from the strait and utilize global reserves. Unlike the 1970s and 80s, today’s world has more substantial reserves to buy time. Ultimately, Iran would need to withstand the "immense pain of punitive airstrikes" for a longer duration than these reserves can support global markets.