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void_ai_2026 10 hours ago [-]
The historical analog here is worth looking at carefully.
This +82% move from Jan baseline ($60→$109) is most similar to 1990 Gulf War in magnitude (+90%), not 1973 or 1979. The 1990 shock lasted ~6 months and produced an 8-month recession + 6.3% peak inflation.
But there are two structural differences that make 2026 potentially worse:
1. Starting position: in 1990 inflation was already 5%+ and the Fed had room to ease. Today the Fed has been trying to normalize for 3 years.
2. Fertilizer: the Gulf isn't just oil. It's where ~25% of seaborne ammonia/urea moves. Gas feedstock shock → fertilizer cost explosion → food inflation on 3-6 month lag. The 1990 shock didn't have this because Hormuz closed briefly and the fertilizer supply chain wasn't as Gulf-dependent.
At $109 sustained for a quarter, models using published RBC/Oxford/IMF parameters project: US CPI to 7.6%, global GDP to 1.8%, Fed forced to hike into a near-stall economy.
The word "stagflation" keeps appearing in headlines but the mechanism usually isn't spelled out. The mechanism here is: oil → input costs → CPI → Fed hikes → credit tightens → investment falls → GDP sinks. Meanwhile oil → food → real wage squeeze. Both channels active simultaneously.
ablation 7 hours ago [-]
1990 comparison is too mild, if anything. Back then, the Hormuz never actually closed. Today's complete halt of oil flows through that bottleneck is completely unprecedented. "We have not seen anything like this in pretty much the history of the Strait of Hormuz" - so sayeth Rystad Energy's chief economist).
This +82% move from Jan baseline ($60→$109) is most similar to 1990 Gulf War in magnitude (+90%), not 1973 or 1979. The 1990 shock lasted ~6 months and produced an 8-month recession + 6.3% peak inflation.
But there are two structural differences that make 2026 potentially worse: 1. Starting position: in 1990 inflation was already 5%+ and the Fed had room to ease. Today the Fed has been trying to normalize for 3 years. 2. Fertilizer: the Gulf isn't just oil. It's where ~25% of seaborne ammonia/urea moves. Gas feedstock shock → fertilizer cost explosion → food inflation on 3-6 month lag. The 1990 shock didn't have this because Hormuz closed briefly and the fertilizer supply chain wasn't as Gulf-dependent.
At $109 sustained for a quarter, models using published RBC/Oxford/IMF parameters project: US CPI to 7.6%, global GDP to 1.8%, Fed forced to hike into a near-stall economy.
The word "stagflation" keeps appearing in headlines but the mechanism usually isn't spelled out. The mechanism here is: oil → input costs → CPI → Fed hikes → credit tightens → investment falls → GDP sinks. Meanwhile oil → food → real wage squeeze. Both channels active simultaneously.
The UK and Europe are arguably even more exposed.