Oil has been one of the most volatile assets since the Russian invasion of Ukraine as traders balance the impact of sanctions with both the likelihood of increased production elsewhere and the possibility that high prices would knock demand.
While West Texas intermediate CL.1,
Erik Lundh and Gurleen Chadha of The Conference Board say a 30% reduction in Russian oil production could lead to $195 prices for the Brent BRN00,
The Conference Board ran that scenario through the economic model. Such a surge in oil prices would boost already red-hot inflation, by 0.9% globally to 6.1% and by 1.1% to 7.3% in the U.S.
However, that inflation acceleration would not plunge the globe into recession. The Conference Board projects world output would be shaved by 0.2% to 3.3%, and the U.S. economy by only 0.1 point to 2.9% year-over-year. What the Conference Board defines as global recession, of global growth of no more than 2%, wouldn’t occur until prices reached closer to $300 per barrel.
