economy
March 7, 2026
Will Iran War Fallout End The Bull Market? When Investors Really Need To Worry
Bank of America says there could be "non-linear" effects on the economy if oil ever stays above $100 a barrel.
TL;DR
- Oil prices have surged significantly, with West Texas Intermediate futures posting their largest ever weekly gain.
- If oil prices persistently remain above $100 a barrel, the U.S. economy could experience 'non-linear' effects.
- Higher-income consumers, who drive spending, may reduce consumption if rising oil prices lead to a stock market downturn.
- Lower-income consumers will be hit harder by rising gasoline prices, potentially increasing delinquencies on loans and constraining their access to credit.
- Increased energy costs could create a bottleneck for artificial intelligence capital spending, delaying projects and acting as a headwind for economic growth.
- A sustained oil price above $100 per barrel could reduce GDP growth by more than 0.60 percentage points, and a doubling of prices could likely lead to a recession.
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