BlackRock CEO warns oil at $150 could trigger a global recession

BlackRock $BLK CEO Larry Fink said oil at $150 a barrel would bring about a "stark and steep recession," warning that a prolonged campaign against Iran could hold energy prices at that level for years, according to The Hill. Fink made the remarks on BBC's "Big Boss Interview" podcast.

Fink said the conflict's resolution will land at one of two extremes. One path he described would see Iranian oil flow back into global markets once military operations concluded, bringing energy prices down. The darker scenario, Fink warned, would leave Tehran as a persistent regional destabilizer, holding crude prices at or above $100 for an extended stretch — potentially near $150 — with what he described as "profound implications" for the global economy.

Oil prices remained elevated this week, with WTI, the U.S. benchmark, at roughly $91 a barrel and Brent, the international benchmark, near $103. AAA data showed the national average for regular unleaded gasoline at $3.98, up more than $1 from the prior month.

BlackRock President Rob Kapito separately cautioned that financial markets have not adequately priced in the war's economic risks, according to Bloomberg. Kapito cautioned that even a swift resolution to the conflict would not necessarily spare the economy — he estimated the potential drag on growth at up to two percentage points, with inflation at comparable risk of moving higher. Even a ceasefire would not quickly ease energy prices, Kapito argued, because supply networks would need time to recover before conditions normalized.

The S&P 500 has held up relatively well, posting a loss of less than 5% across the roughly month-long conflict, according to Bloomberg. Kapito said traditional conflict-era defensive plays — bearish equity bets, gold, and short-duration government bonds — have not responded as investors might have anticipated. Among the conflict's stranger market effects: government bonds have lost value — typically they rally in wartime — and gold has retreated nearly 15%, with both moves reflecting investor fears that sustained energy costs will keep inflation elevated.

Jim Zelter, president of Apollo Global Management, also addressed the Melbourne conference and raised comparable warnings about a U.S. recession and the health of credit markets. Zelter pointed to weakening household sentiment as a pre-existing vulnerability, noting that consumer confidence had already been deteriorating through January and February before oil prices surged. "It's not really a rates shock, it's a confidence shock on spending in the largest economy in the world," Zelter said.

On the supply side, the Trump administration has moved to relieve pressure at the pump by waiving certain sanctions on Iranian, Russian, and Venezuelan oil shipments already in transit, tapping the country's strategic petroleum reserves, and pushing for higher domestic crude output.