So, oil prices are up. There's a conflict involving the U.S. and Iran. You might be worried. Larry Fink, the CEO of the world's largest asset manager, BlackRock Inc. (BLK), is not.
Appearing on Fox News, Fink dismissed the idea of a prolonged war having lasting economic consequences. His bigger prediction was about what happens after. He thinks there's a "great probability" that oil prices could crash—potentially below $50 a barrel—once the conflict ends and if a "neutralized" Iran comes back to sell its oil on the global market.
"I mean, there's probably a great probability that oil is gonna be below 50," Fink said.
It's a bold call with oil recently trading over 4% higher at around $91. But Fink's view is shaped by his firm's perspective. He downplayed short-term energy price spikes, noting that the vast majority of BlackRock's $14.5 trillion in assets is invested for the long term. Short-term volatility, in his view, is just noise.
His advice to investors feeling the heat? Don't run. "Buy more here….This is a good long-term opportunity," he said, expressing concern that people pulling money out of the market was "the wrong outcome."
This view finds some company on Wall Street. Earlier this month, Fundstrat's Tom Lee described the recent market swings as a classic "risk-premium expansion"—a temporary price for uncertainty—not a sign of a broken market. He expects a rebound.
Not everyone is painting a rosy picture, however. An Iranian military spokesperson, Ebrahim Zolfaqari, issued a stark warning, accusing Washington of destabilizing the region and suggesting oil could soar beyond $200 per barrel. The threat hinges on the Strait of Hormuz, a narrow waterway where about one-fifth of the world's oil passes. If tensions there boil over and disrupt shipping, all bets on lower prices are off.
So you have two very different futures on the table: Fink's vision of a sub-$50 oil glut if the conflict resolves, versus a potential super-spike to $200+ if it escalates and chokes off a major supply artery. For now, the market is pricing in some risk, but Fink and his firm are looking past it, betting on calm and a return to—or even a crash below—normal.
