With crude oil prices fluctuating repeatedly, can the global economy demonstrate its resilience once again?
2026-04-20 18:44:31
The Middle East conflict has lasted for approximately seven weeks. Since its outbreak at the end of February 2026, the situation has resembled an inescapable cycle: each week seems to present signs of diplomatic progress or localized easing, such as Iran's announcement of a brief opening of the Strait of Hormuz, only to quickly close it again due to renewed tensions, causing the oil market to fluctuate repeatedly. This situation has exhausted many investors, but it has also gradually led the market to anticipate that the conflict may slowly ease.
The Strait of Hormuz is a crucial passage for approximately one-fifth of the world's oil transportation. Its disruption directly impacts global energy supplies. Even after Iran announced on April 17th that the strait was "fully open" to commercial vessels, oil prices initially plummeted by over 9%, with Brent crude falling to around $90 per barrel. However, the following day, due to the tense standoff between the US and Iran, shipping through the strait was disrupted again, and oil prices rebounded rapidly, with Brent crude rising to around $95 per barrel and WTI crude climbing above $88. Latest data shows that on April 20th, oil prices rose again by over 5% due to tensions. This repeated "opening and closing" is the most prominent characteristic of the current crude oil market.
HSBC CEO: The impact of the disruption has been felt globally.
HSBC CEO Georges Elhedery stated unequivocally that the disruption in the Strait of Hormuz has been "felt globally." He pointed out that the conflict is not only affecting supply chains but is also beginning to erode the confidence of businesses and customers. While capital outflows from the Middle East have been relatively moderate so far, investors are concerned about how long the conflict will last. This global concern makes it easier for ordinary investors to understand why oil price fluctuations affect everyday aspects of life, such as gasoline, logistics, and prices.
Citigroup Research: The global economy has stronger "resilience"
A recent report by Citi Research, titled "Middle East Turmoil: Will Resilience Reappear?", analyzes a severe scenario where the Strait of Hormuz remains closed. The report argues that while this would cause a significant energy shock, the global economy is better prepared and unlikely to fall into a deep recession. Citi points out that the "momentum" of households and businesses—that is, continued willingness to consume and invest—may be the most important stabilizing force.
The report outlines several "adjustment channels" to buffer the impact:
New sources of oil supply have emerged;
Shift to alternative fuels (such as using more liquefied natural gas or other energy sources);
Macroeconomic policies provide support (such as releasing strategic oil reserves or fiscal assistance).
However, Citigroup emphasizes that none of these channels, taken individually, are decisive; ultimately, it depends on the inherent resilience of the private sector (businesses and households). Historically, when Brent crude oil averaged $110 per barrel between 2011 and 2014, global economic growth was not crippled. Now, the global economic structure is more diversified, and supply chains are more flexible, making it significantly more resilient to shocks than in the past.
Short-term pressure from rising oil prices: Will inflation and consumption be affected?
Despite a long-term optimistic outlook, Citigroup cautions that a sudden surge in oil prices due to conflict remains the biggest risk. High oil prices typically reduce consumer spending and make it more difficult for central banks to balance controlling prices with supporting economic growth. Recent weeks have seen a significant decrease in shipping through the Strait of Hormuz, and both the International Energy Agency (IEA) and OPEC have warned that oil demand may soften in the coming months. The dramatic price swings in mid-April—a sharp drop followed by a rebound—perfectly reflect this uncertainty.
However, Citi believes that as long as corporate earnings continue to be solid and geopolitical tensions eventually subside, market focus will shift from short-term energy pressures to the long-term forces driving economic recovery.
Investment bank consensus: Oil prices will face upward pressure in the short term.
Other major banks, such as JPMorgan Chase, hold similar views. They believe that in the baseline scenario, the conflict is likely to ease, and once the strait reopens, oil prices could fall back to $70-80 per barrel, or even lower in the long term. Goldman Sachs, through scenario simulations, points out that even if the strait is completely closed in the short term, the increase in oil prices can be controlled through alternative pipelines and reserve releases. The market has already priced in a certain risk premium for a few weeks of disruption.
In summary, the consensus among major investment banks is that oil prices will face upward pressure in the short term, but the resilience of the global economy makes a systemic crisis unlikely. This is particularly important for Asian investors—Asia is a major oil importer, and high oil prices will increase costs, but its economic resilience and diversified channels can help buffer some of the impact.
How should ordinary investors view this?
As an ordinary investor, there's no need to be alarmed by the daily fluctuations in oil prices. The following points can help you respond more rationally:
Short-term fluctuations are normal : Oil prices fluctuating wildly, a common reaction to geopolitical events. Don't rush to buy or sell energy stocks or related assets based on a single large rise or fall.
Focus on fundamentals : Pay close attention to the soundness of corporate financial reports, the actual recovery of shipping across the strait, and the policy responses of various countries. These are more reliable than individual news items.
Diversify risk : Consider allocating some funds to energy-related sectors (producers may benefit) in a high oil price environment, while hedging against cost pressures in energy-intensive industries (such as aviation, transportation, and chemicals). In the Asian market, themes benefiting from energy restructuring or alternative fuels are also worth noting.
Maintain patience in the long term : The core message of the Citi report is that the global economy has repeatedly demonstrated its resilience to high energy prices in the past, and is likely to show its strength again this time. As tensions gradually ease, markets will refocus on the positive aspects of economic growth.
The seven weeks of volatile conflict may be approaching a turning point. If the second round of negotiations makes substantial progress, or if shipping across the strait truly stabilizes, the crude oil market in the second half of 2026 may shift from a risk-driven phase to a more stable one.
In short, the oil price volatility caused by the Middle East conflict has indeed tested everyone's nerves, but research from mainstream investment banks and Citigroup points to the same conclusion: the global economy has sufficient resilience to absorb the shock. For ordinary investors, remaining calm, diversifying portfolios, and focusing on long-term fundamentals are better ways to navigate uncertainty. In the coming months, rationally observing the actual effects of adjusting investment channels will help us better seize opportunities.
The Strait of Hormuz is a crucial passage for approximately one-fifth of the world's oil transportation. Its disruption directly impacts global energy supplies. Even after Iran announced on April 17th that the strait was "fully open" to commercial vessels, oil prices initially plummeted by over 9%, with Brent crude falling to around $90 per barrel. However, the following day, due to the tense standoff between the US and Iran, shipping through the strait was disrupted again, and oil prices rebounded rapidly, with Brent crude rising to around $95 per barrel and WTI crude climbing above $88. Latest data shows that on April 20th, oil prices rose again by over 5% due to tensions. This repeated "opening and closing" is the most prominent characteristic of the current crude oil market.
HSBC CEO: The impact of the disruption has been felt globally.
HSBC CEO Georges Elhedery stated unequivocally that the disruption in the Strait of Hormuz has been "felt globally." He pointed out that the conflict is not only affecting supply chains but is also beginning to erode the confidence of businesses and customers. While capital outflows from the Middle East have been relatively moderate so far, investors are concerned about how long the conflict will last. This global concern makes it easier for ordinary investors to understand why oil price fluctuations affect everyday aspects of life, such as gasoline, logistics, and prices.
Citigroup Research: The global economy has stronger "resilience"
A recent report by Citi Research, titled "Middle East Turmoil: Will Resilience Reappear?", analyzes a severe scenario where the Strait of Hormuz remains closed. The report argues that while this would cause a significant energy shock, the global economy is better prepared and unlikely to fall into a deep recession. Citi points out that the "momentum" of households and businesses—that is, continued willingness to consume and invest—may be the most important stabilizing force.
The report outlines several "adjustment channels" to buffer the impact:
New sources of oil supply have emerged;
Shift to alternative fuels (such as using more liquefied natural gas or other energy sources);
Macroeconomic policies provide support (such as releasing strategic oil reserves or fiscal assistance).
However, Citigroup emphasizes that none of these channels, taken individually, are decisive; ultimately, it depends on the inherent resilience of the private sector (businesses and households). Historically, when Brent crude oil averaged $110 per barrel between 2011 and 2014, global economic growth was not crippled. Now, the global economic structure is more diversified, and supply chains are more flexible, making it significantly more resilient to shocks than in the past.
Short-term pressure from rising oil prices: Will inflation and consumption be affected?
Despite a long-term optimistic outlook, Citigroup cautions that a sudden surge in oil prices due to conflict remains the biggest risk. High oil prices typically reduce consumer spending and make it more difficult for central banks to balance controlling prices with supporting economic growth. Recent weeks have seen a significant decrease in shipping through the Strait of Hormuz, and both the International Energy Agency (IEA) and OPEC have warned that oil demand may soften in the coming months. The dramatic price swings in mid-April—a sharp drop followed by a rebound—perfectly reflect this uncertainty.
However, Citi believes that as long as corporate earnings continue to be solid and geopolitical tensions eventually subside, market focus will shift from short-term energy pressures to the long-term forces driving economic recovery.
Investment bank consensus: Oil prices will face upward pressure in the short term.
Other major banks, such as JPMorgan Chase, hold similar views. They believe that in the baseline scenario, the conflict is likely to ease, and once the strait reopens, oil prices could fall back to $70-80 per barrel, or even lower in the long term. Goldman Sachs, through scenario simulations, points out that even if the strait is completely closed in the short term, the increase in oil prices can be controlled through alternative pipelines and reserve releases. The market has already priced in a certain risk premium for a few weeks of disruption.
In summary, the consensus among major investment banks is that oil prices will face upward pressure in the short term, but the resilience of the global economy makes a systemic crisis unlikely. This is particularly important for Asian investors—Asia is a major oil importer, and high oil prices will increase costs, but its economic resilience and diversified channels can help buffer some of the impact.
How should ordinary investors view this?
As an ordinary investor, there's no need to be alarmed by the daily fluctuations in oil prices. The following points can help you respond more rationally:
Short-term fluctuations are normal : Oil prices fluctuating wildly, a common reaction to geopolitical events. Don't rush to buy or sell energy stocks or related assets based on a single large rise or fall.
Focus on fundamentals : Pay close attention to the soundness of corporate financial reports, the actual recovery of shipping across the strait, and the policy responses of various countries. These are more reliable than individual news items.
Diversify risk : Consider allocating some funds to energy-related sectors (producers may benefit) in a high oil price environment, while hedging against cost pressures in energy-intensive industries (such as aviation, transportation, and chemicals). In the Asian market, themes benefiting from energy restructuring or alternative fuels are also worth noting.
Maintain patience in the long term : The core message of the Citi report is that the global economy has repeatedly demonstrated its resilience to high energy prices in the past, and is likely to show its strength again this time. As tensions gradually ease, markets will refocus on the positive aspects of economic growth.
The seven weeks of volatile conflict may be approaching a turning point. If the second round of negotiations makes substantial progress, or if shipping across the strait truly stabilizes, the crude oil market in the second half of 2026 may shift from a risk-driven phase to a more stable one.
In short, the oil price volatility caused by the Middle East conflict has indeed tested everyone's nerves, but research from mainstream investment banks and Citigroup points to the same conclusion: the global economy has sufficient resilience to absorb the shock. For ordinary investors, remaining calm, diversifying portfolios, and focusing on long-term fundamentals are better ways to navigate uncertainty. In the coming months, rationally observing the actual effects of adjusting investment channels will help us better seize opportunities.
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- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
