NEW YORK, March 10, 2026, 2:57 PM EDT
BlackRock warned in a weekly market note that the Middle East conflict is driving an energy-led supply shock that could keep inflation pressure elevated, though the firm said the disruption looked more likely to last weeks than months. It said it saw no reason to dispute current market pricing of the shock. BlackRock
The call comes as investors try to judge whether a war-driven jump in oil and gas prices will force central banks to delay rate cuts. Brent crude dropped to about $86.50 a barrel on Tuesday after topping $119 a day earlier, and Standard Chartered and Morgan Stanley both pushed back Bank of England easing calls because of the inflation risk from higher energy costs. Reuters
BlackRock’s view carries weight because the world’s largest asset manager ended 2025 with $14.04 trillion under management. That scale gives its market calls unusual reach just as traders swing from inflation fear to relief on each new turn in the war. Reuters
Natalie Gill, senior portfolio strategist at BlackRock Investment Institute, wrote that the conflict is causing “energy supply disruptions and price shocks” and reinforces the firm’s longer-held view that markets now operate in a “world shaped by supply.” BlackRock
BlackRock argued the strain sits at the heart of liquefied natural gas, or LNG, infrastructure rather than a replay of Europe’s pipeline crunch in 2022. Europe and parts of Asia are more exposed, it said, because they rely more heavily on imported LNG for power and industry. BlackRock
The asset manager kept an underweight, or below-benchmark allocation, in long-term U.S. Treasuries and said it still favored U.S. and Japanese stocks. In Europe, it preferred financials, pharma and infrastructure, and warned that term premia — the extra yield investors demand to hold long-dated bonds — could keep rising if the shock drags on. BlackRock
Markets were calmer on Tuesday. Global stocks rebounded after President Donald Trump said the war with Iran could be “over soon,” and BlackRock shares were up about 1.3% in afternoon trade. Peer Aberdeen struck a similar note last week, with CEO Jason Windsor saying the conflict “could be inflationary if it persists” but was unlikely to do major damage to global growth. Reuters
But BlackRock’s baseline depends on the disruption staying short. The firm said months of supply problems could push inflation higher and materially hurt growth, especially if shipping and export flows through the Strait of Hormuz stay constrained. BlackRock
For now, BlackRock is sticking with the view that the shock is real but contained. Its note said this week’s U.S. inflation data will show whether higher energy costs are starting to spread more broadly through the economy. BlackRock
