1210 ET - A spike in world oil prices to around $140 a barrel over a two‑month period, along with a large rise in natural gas prices and other spillover effects, could be enough to tip parts of the world economy into a mild recession, Ben May and Ryan Sweet of Oxford Economics say in a report. A simulation of such an event showed global GDP down 0.7% at the end of 2026, with mild contractions in the Eurozone, the UK and Japan "while the U.S. nears a temporary standstill." The strength of the subsequent recovery would be determined by how quickly shipping through the Strait of Hormuz rebounds and how fast oil prices, supply-chain stresses, and financial market conditions ease, they say. A less severescenario with $100 oil for two months "would shave a few 10ths of a percentage point off global GDP growth via higher inflation, but recessions would be avoided," they add. (anthony.harrup@wsj.com)

(END) Dow Jones Newswires

March 12, 2026 12:10 ET (16:10 GMT)

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