JPMorgan predicted an Israeli strike on Iran. What else did the bank suggest to keep an eye on?

JPMorgan, in a research report on the Middle East published in May, warned of the likelihood of an Israeli military strike on Iran - and it was right. That was just one of several key scenarios the bank advised investors and policymakers to keep a close eye on.

According to JPMorgan's assessment, a kind of «chess table» has emerged in the Middle East, where several «tipping points» could dramatically change the situation - from Iran and Israel to Syria and Lebanon. In particular, the bank assumed that Israel - perhaps with the support of hardliners against Iran in the U.S. - would promote a strategy of «maximum pressure» on Tehran or the principle of «escalation for de-escalation» and would find the situation ideal for a strike.

Iran, in turn, could double down and rush toward building a nuclear bomb, the bank speculated. Escalation - whether planned or accidental - could develop rapidly and escalate into a wider regional war, the analysts wrote. 

JPMorgan's prediction came true just weeks later - on the night of June 13, the Israeli army strike Iran's nuclear infrastructure and key military facilities. Iran first responded with a drone attack, which the Israeli Air Force intercepted outside the country, and then launched a missile strike on Israel.

In the same report, the bank cited several other key areas in the Middle East that could see changes in the coming weeks.

- Iran nuclear deal. JPMorgan has estimated the probability of a possible new nuclear deal with Iran at 65%. The main question he highlighted in this regard is how many sanctions will Tehran lift? Will Iran spend that money on rebuilding its proxy network or on the economy? The U.S. and Iran had been negotiating, but shortly before the Israeli strikes, U.S. President Donald Trump said that his confidence in a deal had waned. U.S.-Iran talks scheduled for Sunday, June 15, broke down. However, on June 16, The Wall Street Journal reported, citing sources, that Iranian authorities are sending signals to the U.S. through mediators that they are ready to resume the dialog.

- Israel's political future. Political turbulence in Israel could spike well before the 2026 elections due to ongoing anti-corruption trials against Israeli Prime Minister Benjamin Netanyahu, while the rift in the coalition deepens, JPMorgan warned. How long Netanyahu will last, and if he leaves, who will be Israel's next head of state, the bank's analysts wondered.

- «Restarting» Syria Syria's new government opens a window for the return of dialog with the U.S., JPMorgan analysts wrote. Trump's announcement of readiness to lift all U.S. sanctions offers a chance for major energy and infrastructure deals, but the timing of the lifting of restrictions is still unclear, the bank said. The question remains when the US will restore diplomatic relations, open an embassy and resume aid.

- Lebanon is opening up. Lebanon's new president is challenging the Hezbollah group's control in the south, and the fragile calm on the border with Israel is keeping tensions under control, JPMorgan wrote. Strengthening state authority could change the security situation and restore investor confidence, the bank said. But whether it will last long enough for displaced civilians on both sides to return and for a political settlement to take hold remains a question for JPMorgan.

- The rise of AI and technology. Saudi Arabia and the UAE are betting big on artificial intelligence. Billions of dollars are being spent on data centers, cloud solutions, chip manufacturing and climate technology. Because of this and the region is fast becoming a global center for AI investment, JPMorgan analysts point out.

- The upcoming transfer of power. Three leaders - Iran, Saudi Arabia and the Palestinian Authority - are over 80 years old and have health problems, JPMorgan notes. Two of them have no obvious successors. Their departure would be a turning point with unpredictable consequences for the region, the report says.

- U.S. military presence. A debate is raging in Washington over the future of the U.S. military contingent in the Middle East. A major troop drawdown would have a massive strategic and economic impact on the U.S. position, JPMorgan analysts wrote.

- «Kingdom 2.0.» As part of its Vision 2030 strategic program, Saudi Arabia is rapidly relaunching itself: the country is investing huge sums of money in tourism, infrastructure and megaprojects. Among analysts' questions is when the kingdom will finally transform itself from a «not quite ready» emerging market to a prestigious destination for leisure, culture and business. Global perceptions and issues of social openness (including the admission of alcohol and entertainment) will determine how quickly this shift happens, the report said.