BlackRock CEO Larry Fink has warned that crude oil prices could rise to as high as $150 a barrel, a move that may push the global economy into a recession. His warning comes as tensions in West Asia continue and raise concerns over the safety of key energy supply routes.
Speaking on the BBC’s Big Boss Interview podcast published on Wednesday, Fink said it is still too early to know how the will end. However, he made it clear that oil prices will depend on what happens after the fighting stops.
“If there is a cessation of war, and yet Iran remains a threat, a threat to trade, a threat to the Strait of Hormuz, a threat to this peaceful coexistence of the GCC region, then I would argue that we could have years of above US$100 closer to US$150 oil which has profound implications in the economy,” he said.
He added that such a situation could lead to “a probably stark and steep recession”.
Fink said that if the conflict is resolved and Iran becomes a country that is accepted again by the international community, oil prices could fall below their pre-war level of around $70 a barrel. But he also said that this outcome would depend on more than just a ceasefire.
His comments come at a time when oil markets are reacting sharply to both military developments and signs of possible diplomatic progress. The conflict has now lasted for more than three weeks, and uncertainty continues to drive volatility in energy prices.
The situation has raised serious concerns about supply disruptions, This narrow route carries about one-fifth of the world’s oil and gas supply and remains critical for global energy trade.
The International Energy Agency has described the current disruption as the largest in the history of the global oil market. The conflict has nearly halted shipments of oil and liquefied natural gas through this route, adding to fears of a supply shock.
Oil prices have already surged in response. Brent crude climbed to its highest level in nearly four years, at one point nearing $120 a barrel. However, prices later eased by about 4% to around $98 after reports that the United States had sent Iran a 15-point proposal aimed at ending the conflict, raising hopes of a ceasefire.
Despite this, that talks are underway. In a video shared by Iranian media, a military spokesperson dismissed the suggestion, saying the United States was “negotiating with itself” and made it clear that Iran is not willing to enter talks under current conditions.
Fink also warned that rising energy prices could have a direct impact on people, especially in countries that depend heavily on imports.
“Rising energy prices is a very regressive tax. It affects the poor more than the wealthy,” he said.
In the UK, where much of the energy supply is imported, higher oil and gas prices are expected to push up household bills in the coming months. This has led to calls from some energy experts for governments to increase domestic production to reduce dependence on global markets.
As the conflict continues and uncertainty remains, oil markets are expected to stay volatile. The path of prices will depend on both the outcome of the war and how risks to global supply routes are managed in the months ahead.