Economists say risk of recession rises if oil cost hits a key benchmark as Iran war continues

Crude oil prices would need to jump to roughly $138 a barrel amid the war on Iran and stay there for at least a few weeks to put the US at a serious risk of a recession, according to a new survey of economists released Thursday.Iran’s blockade of the Strait of Hormuz, a vital maritime route for 20% of the world’s oil supply, has caused the largest-ever energy supply disruption – sending Brent crude to $105 a barrel and West Texas Intermediate up to $96 as of Thursday.As long as the supply shock is temporary, it likely won’t hurt growth or unemployment – but it will probably boost inflation even higher, according to economists surveyed by the Wall Street Journal this week.Economists see a 32% chance of a recession in the next 12 months – up from 27% in January, according to the survey, which collected answers from 50 economists at Wall Street banks, universities and consulting firms.As for how high crude oil would need to climb to push odds of a recession above 50%, economists’ answers averaged around $138 a barrel – though their responses ranged from $90 to $200, per the survey.Oil prices would need to remain at that elevated level for about 14 weeks to raise recession odds above 50%, according to the experts.That’s the average length of time they cited, with the economists giving a wide range of answers — from four to 55 weeks.Uncertainty about how long the Middle East conflict could last has muddled such projections, with critics saying the Trump administration has given mixed messages on the timeline — prompting pushback from the White House.Robert Fry, chief economist at Robert Fry Economics, currently sees a 40% chance of a recession, with oil at $125 for eight weeks as the tipping point.“My forecast is contingent on the assumption that the Strait of Hormuz will be fully open to tanker traffic by mid-April,” he told the Journal. “If it isn’t, oil prices will go much higher, and I will put a recession in my forecast.”Economists ...