Moody’s Analytics chief economist Mark Zandi said that oil prices would only need to average close to $125 per barrel in Q2 to tip the U.S. economy into recession.
WTI is trading around $89, but with the Strait of Hormuz still closed, that number could be reached quickly.
What Happened
Recession probabilities are high and rising, Zandi said on X, but the firm’s baseline still doesn’t call for an outright downturn unless the price of oil increases.
Zandi called the $125 scenario “not a stretch” given the state of the Middle East.
Between the firm’s February forecast, done before the Iran conflict, and its March outlook at the start of hostilities, Moody’s raised its 2026 oil price forecast by nearly $15 per barrel.
That alone shaved close to …
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