Should oil prices explode to $200 a barrel as some experts have warned, Goldman Sachs thinks the U.S. economy would probably enter a recession (or already be in one).
“We estimate that it would take a sustained oil price increase to $200 per barrel to produce an income shock similar in magnitude to those that precipitated the 1974 and 1979 recessions — and this would significantly increase the 2022 recession odds,” Goldman Sachs chief economist Jan Hatzius said in a new note on Thursday.
Oil prices have come off their highs of around $140 a barrel seen at the start of the Russia-Ukraine war, but remain uncomfortably high. Brent crude oil hovered at $122 a barrel Thursday amid concerns on a new spate of sanctions on Russia by the West.
Prices for Brent crude oil have more than doubled compared to this time last year.
“It is not unfathomable for prices to rocket to $200 a barrel by summer, spur a recession and end the year closer to $50…
