Citadel CEO Ken Griffin stated at the Semafor World Economy conference in Washington, DC, that a global recession is 'inevitable' if the Strait of Hormuz remains closed for an extended period. Griffin specified that if the Strait stays shut for the next six to twelve months, 'the world's going to end up in a recession,' emphasizing that there is 'no way to avoid that' [1].
Griffin highlighted that such a scenario would trigger a significant shift toward alternative fuel sources, including wind, solar, and nuclear energy [1]. He also remarked that the consequences of the ongoing war would have been more severe if the U.S. had delayed military action against Iran, suggesting that timing played a role in mitigating further escalation [1].
Despite the conflict, stock markets have rebounded to levels seen before the U.S. attack on Iran in February. However, Griffin noted that investor optimism is fragile and heavily dependent on the duration of the Middle East war. He pointed out that many market participants believe the risks of further escalation between the U.S. and Iran are not fully reflected in current market prices [1].
Oil prices remain elevated at around $100 per barrel, which is lower than the peak during the conflict but still significantly higher than pre-war levels of just below $70 per barrel. Griffin warned that global economies, particularly in Asia, are vulnerable to further spikes in oil prices [1].
CONCLUSION
Ken Griffin's warning underscores the high stakes for the global economy if the Strait of Hormuz remains closed, with recession risks and elevated oil prices posing significant threats. While markets have shown resilience, investor sentiment remains cautious, and the potential for further escalation in the Middle East continues to weigh on outlooks.