The head of the world’s largest asset manager has warned that a sustained surge in oil prices to $150 a barrel could push the global economy into a sharp recession, as geopolitical tensions continue to destabilise energy markets.
Larry Fink, chief executive of BlackRock, said the trajectory of the Middle East conflict, particularly the role of Iran, will determine whether the world faces a temporary disruption or a prolonged economic shock.
“If oil prices stay elevated and Iran remains a threat, that will have profound implications,” he said, warning that a scenario of sustained high prices could lead to “a probably stark and steep recession”.
Fink outlined two contrasting outcomes for global markets.
In a more optimistic scenario, a resolution to the conflict and a stabilisation of relations could see oil prices fall back below pre-war levels, easing inflationary pressures and supporting growth.
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