Key Takeaways:
BCA Research puts U.S. recession odds at 40%, warning that sustained 10% oil supply cuts could push crude to $200. Oil held above $100 a barrel signals commodity traders see deeper risk than equity investors currently pricing in. Berezin favors Anthropic among 2026 IPO candidates but says a wave of listings often marks a sector peak.
Economist Warns Oil Could Hit $200 If Iran Conflict Disrupts 10% of Global Supply
Berezin spoke with David Lin on The David Lin Report, as equity markets posted a brief gain on reports of possible Iran ceasefire talks. He was skeptical the rally would hold.
“I kind of see the path of the stock market being like that,” Berezin said, comparing equities to a bouncing ball descending a staircase. “It’ll bounce up for a while, but ultimately it’ll end up lower than where it started.”
The Nasdaq had already pulled back roughly 7.5% year to date at the time of the interview, with a trough decline of about 12% making it the worst start to a year since 2022. Berezin explained that stocks remain expensive, trading around 20 times forward earnings on peak profit margins. He called cash his preferred asset class for now.
On oil, Berezin pointed to the Strait of Hormuz, through which roughly 20% of global oil supply passes, and noted that approximately 10% of world supply is currently being disrupted. Demand for oil is highly inelastic, he explained to Lin, meaning prices would likely need to double or triple to reduce consumption by 10%.
“If we have a sustained decrease in global oil production of around 10%, then it’s very easy to see oil prices going to $200,” he said. Berezin added:
“I mean think about the pandemic period during the worst point of the pandemic. Remember all those sort of empty streets? Global oil consumption was down about 20%. If you look in the Straight of Hormuz, that’s how much global oil supply goes through the Straight every day.”
He noted that commodity traders have not followed equity investors into the recent rally, with oil prices remaining elevated above $100 a barrel. Berezin said that gap is a warning sign, given that commodity markets tend to be better informed about where energy prices are heading.
Recession probability for Europe and Japan sits closer to 50%, Berezin said, partly because higher oil prices hurt their terms of trade more than the United States. The dollar benefits in the short term from elevated crude, he added, but faces structural headwinds: a still-expensive valuation by purchasing power parity, decades of current account deficits, and central banks diversifying away from dollar reserves. He argued that gold stands to benefit from that diversification trend over the coming months and years, after a correction driven partly by retail profit-taking.
On the Iran conflict itself, Berezin said a negotiated resolution remains the base case but warned that a power vacuum following the killing of key Iranian leadership makes near-term compromise harder. He insisted that tougher political figures tend to rise in such environments, which works against a quick off-ramp.
The conversation shifted to artificial intelligence (AI) and its impact on the broader tech sector. Berezin detailed that the disruption has moved well past software and now threatens social media companies. He argued that AI agents may increasingly deliver content directly to users, reducing the value of platforms like Instagram and Youtube from destinations to mere content repositories.
On AI hardware, Berezin pointed to a Wall Street Journal report on Caltech research showing sharply lower computational costs for large language models (LLMs). He drew a parallel to internet infrastructure: data transmission has grown at a cumulative pace of roughly 500,000% over 25 years, yet spending on that infrastructure has fallen as a share of GDP. He said AI could follow a similar path, rendering the projected trillions in data center spending unnecessary.
“The irony could be that we end up with an AI-empowered world, but we don’t need like trillions of dollars in data centers to get there,” he said.
That scenario, Berezin remarked, would be bearish for copper and base metals in the short term but potentially bullish over the long term, since genuine AI-driven productivity gains would eventually create demand for physical resources that remain finite.
Asked about anticipated 2026 IPOs including SpaceX, OpenAI, and Anthropic, Berezin said Anthropic was his pick if pressed, citing its positioning in business AI services and the advantage it would gain from lower compute costs. He also cautioned that a heavy IPO wave often signals a sector top.
He pushed back firmly on warnings from Anthropic CEO Dario Amodei that AI could eliminate half of all entry-level white-collar jobs and push unemployment to 10% to 20% within five years. Berezin stressed that economists know that productivity gains translate into income gains in equilibrium, and that any resulting inequality would likely trigger a fiscal and monetary policy response that prevents unemployment from rising sharply.
