Oil prices surge 40% as Iran war creates worst supply disruption in history, Goldman puts recession odds at 25%

As the Iran war entered its third week with the Strait of Hormuz effectively blockaded, oil prices had risen more than 40% since the start of the conflict. Brent crude topped $106 a barrel, the highest in four years. The disruption to the strait -- through which roughly 20% of the world's oil supply normally flows -- forced exporters to cancel shipments and shut production at oilfields, creating what analysts called the worst supply disruption in history. Goldman Sachs revised its 2026 inflation forecast upward by 0.8 percentage points to 2.9% and slashed GDP growth projections by 0.3 points to 2.2%, putting recession probability at 25% in a worst-case scenario. The economic fallout rippled across Asia and Europe, with fuel prices at record highs in multiple countries. Trump, who had campaigned on lowering energy costs and had been unable to build any coalition to reopen the strait, instead claimed the US was 'benefiting from rising oil prices' -- a statement contradicted by economists and the experience of American consumers.