"Dr. Doom" warns: The oil crisis of the 1970s may repeat itself!

Dubbed the "Dr. Doom," Nouriel Roubini warned that if conflicts escalate in the Middle East, the economy may face a situation similar to the oil shocks of the 1970s. On Monday, Roubini painted a bleak picture of the world economy in an interview. He pointed out that risks in the Middle East are rising, with the conflict between Israel and Palestine spreading in the region and potentially triggering a military response from Iran, one of the world's largest oil-producing countries. Roubini stated that if the conflict between Israel and Iran escalates into a full-scale war, it could impact Iran's oil exports and lead to a significant surge in crude oil prices. This scenario would resemble the oil shocks experienced by the global economy in the 1970s, when geopolitical tensions led to soaring oil prices. Roubini said, "If the war escalates into a full-scale war between Israel and Iran, oil production and exports in the Gulf region could be blocked for weeks or even months, resulting in an oil price shock similar to the Yom Kippur War in 1973 or the Iranian Revolution in 1979." He acknowledged that so far, the impact of Middle East conflicts on oil prices has been relatively mild. Other industry experts also warned that Iran's involvement in the conflict between Israel and Hamas could cause significant volatility in the oil market. An analysis by the Commonwealth Bank of Australia showed that an attack by Israel on Iran's oil infrastructure could jeopardize up to 4% of global oil supply. A strategist at the bank predicted that in such a scenario, Brent crude prices could rise to $85 per barrel. Roubini has been particularly concerned about oil price shocks over the past year. In 2022, he stated that such shocks could trigger an economic recession or a stagflation crisis reminiscent of the 1970s. Roubini has also expressed that Trump's potential re-election could be the biggest threat to the global economy. He noted that the U.S.' protectionist trade policies would undoubtedly become "more severe," and Trump's promised tax cuts could worsen U.S. debt. He suggested that Trump might replace Federal Reserve Chairman Powell with a "more moderate, more compliant figure" who could cut interest rates prematurely and allow inflation to soar. Recently, Roubini has moderated his views on the U.S. economic outlook. He revised his earlier predictions of an impending economic recession this year but continues to warn investors to be wary of the possibility of a stagflation crisis