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Could the standoff in the Strait of Hormuz trigger a global recession? Economists weigh in
Economists say a prolonged oil shock could lift inflation to 7.7% and push global output into contraction.
- On Tuesday, President Donald Trump extended a ceasefire with Iran, though the Strait of Hormuz remains under Iranian control while the U.S. blockades Iranian ports in the waterway.
- Brent futures registered at about $106 a barrel on Friday, roughly 50% higher than pre-war levels, driving up diesel costs for goods transported globally.
- Countries are taking drastic measures: Pakistan implemented a two-week school holiday to conserve fuel, the Philippines declared an energy emergency, and thousands of flights across Europe were canceled due to jet fuel spikes.
- While the International Monetary Fund projected 3.1% growth this year, Paul Krugman, an economics professor at the City University of New York Graduate Center, warned Monday that a recession is "more likely than not" if the Strait remains closed for three months.
- Oxford Economics warned that a six-month impasse could push oil to $190 in August, potentially tipping the global economy into contraction as analysts fear shortages could soon hammer shoppers.
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Total News Sources10
Leaning Left1Leaning Right0Center4Last UpdatedBias Distribution80% Center
Bias Distribution
- 80% of the sources are Center
80% Center
L 20%
C 80%
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