"Fortune telling" on the Iran war: 60% probability of ending within two weeks? How to position in crude oil?

Huitong Finance APP News — BCA Research Chief Geopolitical and Macro Strategist Marco Pappich proposed a “formula” to estimate the duration of the Iran war: War Duration = Iran’s Pain Threshold. He believes Iran’s pain threshold is much lower than market and conflict participants’ expectations, predicting a 60% chance that the conflict will end in about two weeks, and advises investors to focus on assets benefiting from ongoing conflict, such as Brent crude futures and oil equipment ETFs. On Tuesday (March 17) during Asian trading hours, U.S. crude oil prices fluctuated upward, currently trading around $96.15 per barrel, up approximately 2.78% for the day.

Pappich emphasized that the U.S. is unleashing firepower in a punitive manner of “death, flames, and anger,” ultimately forcing Tehran to seek peace.

Low Pain Threshold + Strong U.S. Punitive Bombing = 60% Probability of Conflict Ending in Two Weeks

Pappich pointed out that Iran’s pain threshold is severely underestimated; the scale and intensity of U.S. punitive bombings exceed expectations; and a coordinated global response is forming.

Combining these three factors, the formula indicates a 60% chance of short-term conflict resolution. He believes Iran cannot sustain prolonged high-intensity strikes, and the pressure on the regime will force it to compromise at some point.

B-52 Bombers’ Power Underestimated, Iran’s Drone Counterattacks Limited

Pappich emphasized that the destructive power of U.S. B-52 bombers is underestimated (large-scale conventional bombing effectively targets infrastructure and military sites); Iran’s ability to counterattack with drones is limited (insufficient in quantity, precision, and persistence to change the battlefield).

U.S. air superiority and precision strike capabilities far exceed Iran’s expectations, and continuous bombing will quickly erode Iran’s military and economic resilience.

Strait of Hormuz Likely to Be Forced Open, Multinational Coordination Underway

Pappich believes the Strait of Hormuz may be forcibly opened, not only relying on a “lightning war” by the U.S., but also due to coordinated responses from other parts of the world: India has ensured its two oil tankers pass through the strait unimpeded; France, Italy, and Pakistan are negotiating or planning escort missions with Tehran; during the Iran-Iraq war in the 1980s, multiple countries’ navies jointly cleared mines to open the strait.

Many countries are unwilling to tolerate long-term restrictions on one-fifth of global oil supply, and joint escort and mine-clearing operations are increasingly likely.

Iran Must Weigh Costs of Blockade; World Cannot Tolerate Long-Term 20% Oil Supply Restriction

Pappich analyzed Iran’s strategic calculus: blocking the strait can establish deterrence, but the longer it lasts, the less tolerable it becomes for the rest of the world; restricting 20% of global oil supply will trigger multiple countries to intensify sanctions and punitive measures; ultimately, Iran must choose between “deterrence benefits” and “costs of isolation.”

He believes Iran’s rational threshold is low; once coordinated international responses solidify, Tehran will find it difficult to bear the costs of a sustained blockade.

Recommended Trades Benefiting from Ongoing Conflict: Brent Futures, Oil Equipment ETFs, Tanker Shipping

Pappich recommends trading strategies that benefit from ongoing conflict: Brent crude futures—high probability of sustained high oil prices; U.S. oil equipment ETFs—high oil prices stimulate U.S. shale oil production and equipment demand; tanker shipping—rising escort demand and freight premiums.

He believes that even with a 60% short-term end probability, medium-term uncertainty will continue to support energy-related assets.

Germany, UK, and Italy Respond Coldly to Trump’s Military Support Calls

Despite Pappich’s optimistic view on coordinated international responses, officials from Germany, Italy, and the UK publicly responded on Monday with indifference to Trump’s calls for military support.

European countries have high energy dependence but limited willingness for direct military intervention, preferring diplomatic pressure and limited logistical support to avoid full involvement in Middle East conflicts.

Summary

BCA Chief Geopolitical Strategist Pappich proposed the “war formula”: Iran’s Pain Threshold (U.S. punitive bombing intensity + global coordinated response) = conflict duration. He predicts a 60% chance of ending within two weeks, believing Iran’s threshold is underestimated, U.S. B-52 destructive power is underestimated, and Iran’s drone retaliation is limited. The Strait of Hormuz may be forcibly opened, with multi-national coordination underway (India’s oil tanker passage, France, Italy, Pakistan negotiations). Iran must weigh the costs of blockade; the world cannot tolerate long-term restrictions on 20% of oil supply. Europe’s response to Trump’s military support calls is cold, and oil prices remain high. Short-term optimistic signals conflict with battlefield realities; investors should beware of Iran’s potential extreme retaliation causing oil price reversals, and monitor progress on multi-national escort efforts and Iran’s responses.

(US Crude Oil 4-hour continuous chart, source: Yihuitong) As of 10:08 Beijing time, US crude oil is trading at $96.15 per barrel.