Raymond James states that the likelihood of U.S. military action against Iran is "very high at this stage"

Investing.com - Raymond James analysts stated that there is a high likelihood that the United States will carry out military action against Iran at this stage, although the scope and objectives of any such action remain uncertain.

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In reports to clients, Raymond James analysts including Ellen Ehrnrooth and Ed Mills predicted that the Trump administration might lean toward “more targeted actions, but the reality leaves the possibility of a broader conflict still on the table.”

The rapid increase in US military equipment in the Middle East, coupled with negotiations stalling after a US-Iran meeting earlier this week, has increased the possibility of a new round of strikes.

The controversy centers on the US demanding Iran to cease its nuclear program and agree to restrictions on its ballistic missile agenda. Washington also calls on Tehran to reduce support for armed proxies in the region. Iran has so far rejected these conditions, offering only minimal concessions, while denying attempts to develop nuclear weapons.

US President Donald Trump said Thursday that he would decide on the next steps regarding Iran within 10 days, vowing to “reach an agreement with Tehran or obtain an agreement in some way.”

Meanwhile, Iranian officials have pledged to respond with maximum force to any attack. Supreme Leader Ali Khamenei stated that Iran could launch such a fierce strike against US forces that “they will never be able to stand up again.”

Raymond James analysts said, “Despite remaining constraints… the scale of military buildup indicates at least a genuine willingness to fulfill threats made in recent weeks.”

For financial markets, the possibility of US strikes against Iran—another action following last year’s US attack on the country’s nuclear infrastructure—has sparked speculation about potential disruptions to key oil supplies in the Middle East. Iran is a major oil producer and influences oil flows through the Strait of Hormuz, a vital waterway carrying one-fifth of global oil supplies.

Some observers predict that US strikes could push up oil prices, thereby exerting upward pressure on inflation in many economies. Analysts at Capital Economics stated that as a result, central banks in various countries might be forced to slow down potential rate cuts.

Brent crude oil prices declined during European trading on Friday morning but remained near the highest levels since early August.

In recent years, markets have responded relatively mildly to geopolitical developments, but Raymond James analysts noted that “the increasing uncertainty and the risk that actions could escalate into a broader conflict may test this dynamic.”

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