Overview
- Brent crude recently settled near $92, roughly 40% above Goldman Sachs’ estimated $66 “unaffected” price after a weekly jump of about 35%, the biggest since at least 1985.
- Tanker traffic through the Strait of Hormuz has collapsed from an average of 24 vessels per day to near zero, and analysts say a prolonged disruption could push prices above $100, with some scenarios pointing to $120 or higher.
- Rapidan Energy’s Bob McNally warns that a sustained closure of Hormuz would all but ensure a global recession, underscoring how outcomes hinge on the duration of the blockade.
- Historical patterns suggest an oil shock becomes recessionary when a large, persistent price spike meets a vulnerable economy or a hawkish central bank, conditions not clearly present as the Fed has cut rates six times since 2024 and inflation expectations remain anchored.
- Analysts emphasize the larger U.S. risk is rising uncertainty and weaker foreign demand that could delay business investment, so trends in private investment and hiring are the key indicators to watch.