BlackRock (BLK) CEO and co-founder Larry Fink has warned that oil rising to $150 could lead to a “stark and steep recession.” Brent crude futures (BZ), the international benchmark for oil, have surged 26% to $96 since the start of the U.S.-Iran war on February 28.
Claim 30% Off TipRanks
Trade QQQ with leverageFink noted that it is too early to determine the outcome of the war, although he expects one to two scenarios to unfold. The first is for Iran to be integrated into the international community following the end of the war, which would send oil below its pre-war level.
Strait of Hormuz Tensions Keep Oil Elevated
If the first scenario doesn’t play out, the second scenario is much less rosy, with Fink calling for a recession and “years of above $100, closer to $150 oil, which has profound implications in the economy.”
While traffic through the Strait of Hormuz has slightly picked up in recent days, it’s still well below the rate seen before the start of the war. Iran has continued to reiterate that it will attack any U.S.-linked vessel crossing through the passageway and rejected an initial U.S. proposal to end the war, citing the demands as “excessive.”