Institutional Warning: Oil Price to Rise to $200 or Trigger Global Economic Recession
BlockBeats News, April 29th. In its latest quarterly outlook, BNP Paribas warned that if the international oil price rises to $200 per barrel and is coupled with supply chain disruptions and global monetary tightening, the global economy may fall into a recession. BNP Paribas stated that the escalating Iran situation is already impacting the global economy. The bank expects that compared to earlier forecasts this year, global GDP growth will slow down, inflation will remain high, and central banks around the world may be forced to maintain a more hawkish policy stance.
Impacted by the Middle East situation, international oil prices continued to rise on Wednesday. WTI crude oil saw an intraday gain of up to 5%, while Brent crude surpassed $109 per barrel. The market is concerned that the confrontation between Iran and the United States over the Strait of Hormuz may further threaten global energy transport.
BNP Paribas believes that even if the oil price does not reach the extreme scenario of $200 per barrel, its baseline forecast indicates an average oil price of around $100 per barrel in the first half of the year, and the global economy is already close to the edge of a recession. The bank defines a "global recession" as global GDP growth falling below 2.5%, and it is expected that global economic growth will be around 3% this year, below the average level of 3.5% over the past decade. The report points out that in addition to the surge in oil prices, two other major risks could trigger a recession:
Disruption in the transport through the Strait of Hormuz leading to worsening energy and supply chain bottlenecks;
High inflation forcing global central banks to continue tightening monetary policy.
BNP Paribas also warned that prolonged conflicts may affect the supply of helium needed for chip manufacturing, Asian rubber and chemical components, as well as global fertilizer supply, further driving up food and industrial commodity prices.
