BlackRock CEO says Iran conflict could lower energy prices long term

08:20

By: Dakir Madiha

BlackRock CEO says Iran conflict could lower energy prices long term

BlackRock chief executive Larry Fink said a military conflict with Iran could ultimately reduce global energy prices over the long term, offering a view that contrasts with the current surge in oil markets.

Speaking Wednesday at BlackRock’s US Infrastructure Summit in Washington, Fink argued that a broader opening of Iran’s energy sector to global markets could eventually increase supply and push prices lower. According to The Wall Street Journal, he said Iran’s energy market could become accessible internationally after the conflict, creating the potential for lower long term energy costs rather than sustained increases.

Fink also linked his outlook to technological changes. He said advances in artificial intelligence and productivity improvements could generate deflationary pressures that offset current market shocks.

His remarks came during a day of intense volatility in energy markets. Brent crude futures jumped nearly five percent after US officials reported that Iran had deployed naval mines in the Strait of Hormuz, a critical route for global oil shipments. The United Kingdom also confirmed that three cargo vessels had been struck by projectiles near the waterway.

The International Energy Agency responded by announcing plans to release a record 400 million barrels of oil from strategic reserves held by its member countries. The volume is more than double the emergency release following Russia’s invasion of Ukraine in 2022 and aims to stabilize global prices.

The conflict began on February 28 when the United States and Israel launched coordinated strikes against Iranian targets. The fighting has effectively closed the Strait of Hormuz, a passage that normally carries about one fifth of the world’s oil supply.

Iran has retaliated by targeting oil infrastructure and refineries across Gulf Arab states. The Islamic Revolutionary Guard Corps has warned that any vessel moving through the strait could face attack. US Central Command said Tuesday that American forces destroyed 16 Iranian mine laying vessels operating near the waterway.

Fink’s assessment appears to rest on the possibility that a political settlement or regime change could eventually allow Iran’s vast energy reserves to enter global markets more freely. Iran holds some of the world’s largest oil and gas resources, and expanded access could reshape supply dynamics.

Earlier this month, the BlackRock Investment Institute described the conflict primarily as a volatility shock rather than a reason for investors to dramatically reduce portfolio risk, though it acknowledged that prolonged supply disruption remains a growing concern.

In the short term, however, the impact has been immediate. Oil prices have risen about 20 percent since the war began, according to the Associated Press, and fuel costs are already rising for consumers worldwide.

Saudi Aramco chief executive Amin Nasser warned that continued disruption to tanker traffic through the Strait of Hormuz would have serious consequences for the global economy.