The global economy has shown greater resilience than expected following the closure of the Strait of Hormuz, although BCA Research warned that the opportunity to avoid a recession may be shrinking rapidly.
Chief Strategist Peter Berezin identified seven key reasons that have so far cushioned the global economy, while warning that “the risk of a recession will increase meaningfully if the Strait of Hormuz remains closed into June.”
The first factor is timing. According to BCA Research, oil shocks usually affect economic growth with a delay, with the biggest impact on GDP typically occurring around four quarters after the initial disruption.
The second reason is that the global economy now consumes far less oil relative to GDP than in previous decades, although the firm noted that this advantage is partly offset by the increased interconnectedness of global supply chains.
Third, long-term inflation expectations have remained relatively stable, reducing pressure on central banks to aggressively raise interest rates.
Fourth, fiscal support is helping soften the impact, aided by measures included in the One Big Beautiful Bill Act as well as tariff rebate payments from the U.S. Treasury.
Fifth, companies have been stockpiling inventory as a precaution, mirroring purchasing patterns seen during the pandemic.
Sixth, the boom in artificial intelligence has become a major source of economic growth, with spending on IT hardware and software reaching a record 4.9% of GDP during the first quarter of 2026.
Seventh, oil futures markets continue to trade in deep backwardation, suggesting investors still believe the current disruption will prove temporary.
BCA Research said it currently maintains a neutral stance on global equities, but warned it “will adopt a more defensive posture” if the oil shock persists.