Ken Griffin: If the Strait of Hormuz Closed for More Than Six Months, a Global Recession Is Unavoidable
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Ken Griffin, CEO of Citadel, warns that a prolonged closure of the Strait of Hormuz could lead to a global recession. The Strait is crucial for global oil trade, and its disruption would cause high energy prices, entrenched inflation, and economic hardship.
Ken Griffin, CEO of Citadel, has warned that if the Strait of Hormuz remains closed for six to twelve months, a global recession is unavoidable. The Strait is a critical waterway for global oil trade, with around 20% of global oil passing through it. A prolonged closure would lead to persistently high energy prices, with oil prices potentially remaining above $100 per barrel. This would cause comprehensive cost pressures on energy-intensive sectors such as shipping, manufacturing, and chemicals. Inflation would become more entrenched, putting central banks in a difficult position between protecting growth and fighting inflation. Asian economies, heavily reliant on Middle Eastern crude imports, would be among the first to suffer.
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