BlackRock CEO Larry Fink warns oil prices could hit $150 amid Iran-US war, leading to ‘global recession’

The escalating conflict between Iran, Israel and the United States has lasted more than three weeks, with Washington deploying more than 4,000 marines to the region and considering further troop mobilizations as rumors of a ceasefire surfaced, with oil markets swinging sharply on military developments and diplomatic signals.Larry Fink, one of BlackRock’s eight co-founders and now chairman and chief executive, warned that if Iran continues to threaten energy supply routes after the war ends, oil prices could surge to $150 a barrel and send the global economy into recession.

Conflicts shaping the direction of oil markets

BlackRock is the world’s largest money management company, with approximately US$14 trillion in assets, and is one of the world’s most influential financial institutions. Its sheer size and influence give Chairman and CEO Larry Fink a unique advantage over global events and their potential impact on the economy.during an interview BBC “Big Boss” interview He said in a podcast published on Wednesday that it was too early to determine the final outcome of the war, but the direction of oil prices would depend on what happens next.He said that if the conflict is resolved and Iran becomes a country “that can once again be accepted by the international community,” oil prices may fall back below pre-war levels, around $70 a barrel.But this outcome depends on more than just a ceasefire.

“Oil prices have been over $100 for years…close to $150”

Fink warned that even if the fighting stops, markets could remain under pressure if Iran continues to pose a threat to trade and regional stability, particularly around the Strait of Hormuz.“If the war stops but Iran remains a threat, a threat to trade, a threat to the Strait of Hormuz, a threat to peaceful coexistence in the GCC region, then I think we could have oil prices closer to $100, closer to $150 in the next few years, and that has profound economic implications,” he said. He added that such a scenario would amount to “potentially a deep and severe recession.”

Supply disruptions focus on one key choke point

The warning comes as the conflict has brought oil and liquefied natural gas shipments through the Strait of Hormuz to a virtual halt. The Strait of Hormuz is a narrow passage that normally carries about a fifth of the world’s natural gas and crude oil supplies.The scale of the disruption has alarmed the International Energy Agency, which described the situation as “the most severe supply disruption in the history of global oil markets.”

Brent crude oil prices have climbed to their highest level in nearly four years, briefly approaching $120 a barrel.However, on Wednesday, reports that the United States had sent Iran a 15-point proposal aimed at ending the war raised the possibility of a ceasefire, sending prices down about 4% to around $98.Iran has strongly denied Donald Trump’s claims that talks are underway to end the ongoing conflict, with its top military command scoffing at Washington’s statement.In a video shared by Iranian media, a military spokesman flatly dismissed the suggestion, saying the United States was actually “negotiating with itself.” The spokesman sent a defiant message, stressing that Tehran had no intention of negotiating under the current circumstances.“Our first and last words…were, are, and always will be: People like us will never come to terms with people like you. Not now and never,” the spokesperson said.Meanwhile, Washington has deployed more than 4,000 U.S. Marines to the region and is considering sending a combat brigade from the Army’s 82nd Airborne Division, a sign that the situation may escalate.

Infrastructure damage and recovery delays

Even if hostilities ease, energy supplies are unlikely to rebound quickly. Fatih Birol, executive director of the International Energy Agency, said that more than 40 energy assets in nine countries in the Middle East suffered “severe or very severe” damage, which means that oil fields, refineries and pipelines cannot be restored immediately.

This disruption will prolong disruptions to global supply chains even after the conflict ends. Speaking at the Australian National Press Club in Canberra on Monday, Birol compared the current situation to past crises: “The impact of the current disruption is equivalent to the combined impact of the two major oil crises of the 1970s and the gas crisis following Russia’s invasion of Ukraine in 2022.” The impact is not limited to oil and gas, he added. Birol said: “The trade of some important arteries of the global economy, such as petrochemicals, fertilizers, sulfur, and helium, are all disrupted, which will have serious consequences for the global economy.”

Impact on households and push for alternative energy

Fink also warned that higher energy prices would have a direct and uneven impact on consumers, especially in countries that rely on imports. “Energy price increases are a very regressive tax. It affects the poor more than the rich,” he said. In the UK, which imports most of its energy, rising oil and gas costs are expected to hit household bills in the coming months. Such pressure has prompted some energy experts to call on governments to expand domestic oil and gas production to reduce the risk of external shocks.

At the same time, Fink said continued high prices could accelerate the shift to alternative energy sources. “If oil prices went to $150, there would be a lot of countries switching to solar and even wind so quickly,” he said. “Use the resources you have without question, but also be proactive in turning to alternative sources.”