ABC News Daily Why Alan Kohler is worried about a recession
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Mar 30, 2026 Alan Kohler, seasoned finance journalist and ABC finance expert, warns oil supply shocks could tip the economy into recession. He discusses historic oil crises, current Iran war risks, shipping disruptions through the Strait of Hormuz and wider supply threats to food and semiconductors. He stresses the danger of prolonged conflict and how rising fuel and inflation pressures could force tough rate decisions.
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1973 Oil Shock Quadrupled Prices
- The 1973 Yom Kippur War triggered an oil price shock that quadrupled prices and kept them high long after the embargo ended.
- Alan Kohler explains global supply fell only ~5–7% but prices rose from $3 to $12 a barrel, driving sustained inflation and stagflation.
1979 Shock Led To 20% Interest Rates
- The 1979 Iranian revolution caused a second oil shock and US Fed chair Paul Volcker raised rates to about 20%, triggering a severe global recession.
- Alan Kohler links the price shock directly to high interest rates and worldwide unemployment surges.
Current Supply Loss Exceeds 1970s Shocks
- The current Iran-related disruptions have shut far more supply than the 1970s shocks, with much of Gulf output affected and prices jumping from about $65 to $115 a barrel.
- Kohler notes about 20% of oil flows through the Strait of Hormuz and current disruptions reduce flows dramatically, making energy shortages crippling.