JP Morgan Chase and Co. has projected that global oil prices may peak at $80 per barrel if the US and European Union re-impose sanctions on Iran and as Western powers expand the scope of the Syrian civil war.

This forecast is coming even as oil prices now spiked at more than three-year highs just as crude-related assets are starting to look attractive. Brent last cost $80 a barrel in November 2014. The current cost hovers around $72.62 per barrel in the international market.

JPMorgan strategists, led by John Normand, in a note at the weekend, hinged their projections on the recent “tax gift” to US corporations and consumers making it an opportunity to own petro assets, amongst other potentially-positive outlook in the global oil sector.

“Risks we thought might materialize this summer through Iran sanctions are emerging somewhat more quickly due to events in Syria,” the strategists stated.

New Syrian hostilities are likely to have a muted effect on oil, however, since the nation’s production has already fallen so deeply due to the seven-year-long war.

A possible decision in May on Iran sanctions may be “the start of a process that maintains low-intensity stress on oil markets that can deliver higher prices and above-average volatility,” the strategists wrote, comparing it to the Arab Spring of 2011 rather than the major oil shocks of 1973, 1979 and 1990. Since the US doesn’t buy Iranian crude, it would take sanctions from the EU and even some Asian customers to depress markets materially.

The forecast follows others calling this a good time to own energy stocks.

For instance, Morgan Stanley strategist, Andrew Sheets, has noted that energy “has historically been a very consistent late-cycle outperformer.”

Similarly, Brian Barish of Cambiar Investors and James Paulsen of Leuthold Weeden Capital Management also pointed to energy shares having been out of favor in recent years.

Last Tuesday, net bullish positions in Brent futures reached a record high.

JPMorgan’s strategists have positioned for higher oil prices that could last three to six months, before US shale production can respond, rather than for an acute supply cut that delivers subtrend global growth.

“Equity and credit markets probably won’t welcome a geopolitical/supply-driven rise to $80 that could persist for several months,” they wrote, but it won’t be “an event that drives a bear market in either.”

Among JPMorgan’s oil-related portfolio recommendations, include Energy stocks, Long West Texas Intermediate call spread and Brent calendar spreads, Overweight S&P Energy, High-yield energy credit, U.S. versus Euro five-year inflation-linked bonds, Long Canadian dollar versus Japanese yen and Long Norwegian krone versus euro.

Energy stocks Long West Texas Intermediate call spread and Brent calendar spreads Overweight S&P Energy High-yield energy credit U.S. versus Euro five-year inflation-linked bonds Long Canadian dollar versus Japanese yen Long Norwegian krone versus euro

While Brent is up eight per cent in 2018 and more than 30 per cent over the past year, those aren’t major moves for such a volatile market, according to JPMorgan. It also isn’t alarming when strong demand has aided the rise.

“Oil is the standout market this month in that it is the only global asset price making new 2018 highs,” the strategists wrote. “But the reason we refocus on crude this week is geopolitical context and systemic potential.”