Four major institutions raise the probability of a U.S. recession to over 30% amid oil crisis.

During the week of March 25, four institutions—Moody’s Analytics, Goldman Sachs, JPMorgan Chase, and EY-Parthenon—each using different methodologies, independently raised their probability estimates for a U.S. recession over the next 12 months to above 30%. Moody’s estimated 48.6%, EY-Parthenon 40%, JPMorgan Chase 35%, and Goldman Sachs 30%.

This matter itself is more important than any specific number.

Moody's Analytics machine learning model produced the highest reading to date. According to Fortune on March 25, Moody's chief economist Mark Zandi said the figure was only 15% in December 2024, rose to 42% by the end of 2025, jumped to 49% in February this year, and the latest calculation stands at 48.6%. Zandi expects the next data release to likely push this figure above 50%. The baseline recession probability typically ranges between 15% and 20%, making the current reading nearly three times the normal level.

Goldman Sachs’s path has been equally steep. According to Fortune, Goldman Sachs revised its forecast from 15% in December 2024 to 20% in January, then to 25% on March 12, and by March 25, it had reached 30%. The pace of upward revisions—doubling every two weeks—is rare in Goldman Sachs’s historical forecasts. Goldman Sachs also raised its PCE inflation forecast by 0.2 percentage points to 3.1%, lowered its full-year GDP growth forecast to 2.1%, and pushed back its first rate cut expectation from June to September.

JPMorgan Global Research estimates 35%. According to CNBC on March 19, JPMorgan economists simultaneously lowered their S&P 500 year-end target from 7,500 to 7,200, with a downside scenario potentially reaching 6,000.

EY-Parthenon was the last of the four to speak, but its 40% probability comes with an interesting qualifier. According to World Oil on March 24, EY-Parthenon’s chief economist, Gregory Daco, characterized the current situation as a “multi-dimensional disruption,” noting that the impacts extend beyond crude oil supply to include refining systems, LNG infrastructure, and fertilizer supply chains. This means that even if oil prices decline, inflationary pressures will not necessarily ease in tandem.

A common variable among the core assumptions of the four institutions is oil prices. Since the U.S. and Israel launched strikes against Iran on February 28, Brent crude has risen from approximately $70 per barrel, breaking through $100 on March 8—the first time in four years—and briefly reaching $115 last week. As of March 25, it closed at $102.22.

According to the IEA’s March report, the Strait of Hormuz previously saw an average of 20 million barrels of crude oil passing through daily, accounting for about 20% of global seaborne oil trade. Following the outbreak of conflict, oil production in Gulf countries has been reduced by at least 10 million barrels per day. Zandi estimated in an interview with Fortune that about one-third of the world’s fertilizer supply also passes through this waterway.

This level of energy shock has occurred four times in history.

According to JPMorgan Research, four of the five major oil price shocks since the 1970s were followed by recessions. The 1973 Yom Kippur War caused oil prices to surge by 300%, and the U.S. entered a recession in November of that year. The 1979 Iranian Revolution doubled oil prices, and a recession began in January the following year. The 1990 Gulf War pushed oil prices up by 180%, with the recession starting almost simultaneously. The supercycle from 2002 to 2008 saw cumulative oil price increases of 592%, ultimately culminating in the global financial crisis.

The current rally of about 80% in the 2026 Hormuz Strait crisis is the smallest among the five instances. However, there is a key difference: the scale of this supply disruption is larger than any previous one. The IEA has described it as "the largest disruption to energy supplies since the 1970s energy crisis."

JPMorgan Chase economists have provided a quantitative estimate: a sustained 10% increase in oil prices reduces U.S. GDP by approximately 15 to 20 basis points.

On March 25, Larry Fink, CEO of BlackRock, which manages over $10 trillion in assets, provided a more direct framework than numbers in an interview with BBC.

According to Fortune, Fink said: "There will be no middle ground; the outcome will be one of two extremes."

In the first scenario, Iran is accepted by the international community and re-engages in global trade, oil supplies return to normal, oil prices fall to $40 per barrel, and the global economy experiences growth. In the second scenario, conflict persists, the strait remains closed for years, oil prices rise above $100 and approach $150, plunging the global economy into recession. Fink specifically noted that the ripple effects of high oil prices would extend to agricultural products and fertilizers, as both are byproducts of natural gas.

However, Fink also ruled out one possibility: he explicitly stated that there will be no systemic financial crisis like the one in 2008, as current financial institutions have significantly higher capital adequacy ratios than they did back then.

Returning to the original question: Moody’s used a machine learning model, Goldman Sachs employed a macroeconomic forecasting framework, JPMorgan tracked a five-factor indicator system, and EY-Parthenon approached it from a supply chain perspective. Four distinct methodologies converged on the same direction within the same week.

According to a March survey by the University of Michigan, the consumer confidence index fell to 55.5, placing it at the 2nd percentile historically. According to BLS data, U.S. non-farm payroll employment decreased by 92,000 in February, reversing market expectations of an increase of 60,000. Leisure and hospitality saw a loss of 27,000 jobs, healthcare lost 28,000, manufacturing lost 12,000, and federal government employment declined by 10,000. According to BLS statistics, federal government employment has cumulatively decreased by 330,000 since its peak in October 2024, a decline of 11%.

Zandi said in the interview that if oil prices reach around $125 per barrel on average in the second quarter, “that would push us into a recession.” At Brent’s current level of approximately $102, there is still a $23 gap to that threshold.

The predictions from these four institutions may not be accurate. But when all four reach similar conclusions in the same week using different methods, their impact goes beyond just a probability figure. Companies may delay investment plans, consumers may cut back on spending, and these very actions can, in turn, depress economic data, causing the next round of forecasts to rise further.