{"id":103767,"date":"2026-05-08T10:13:08","date_gmt":"2026-05-08T10:13:08","guid":{"rendered":"https:\/\/www.europesays.com\/iran\/103767\/"},"modified":"2026-05-08T10:13:08","modified_gmt":"2026-05-08T10:13:08","slug":"dr-doom-warns-of-bear-market-recession-in-worst-case-iran-war-outcome","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/iran\/103767\/","title":{"rendered":"‘Dr. Doom’ Warns of Bear Market, Recession in Worst-Case Iran War Outcome"},"content":{"rendered":"

Investors betting that the Iran war is about to end could be in for a wake-up call, according to Wall Street’s “Dr. Doom<\/a>.”<\/p>\n

\n Loading audio narration…\n <\/p>\n

Nouriel Roubini\u2014the top economist who called the Great Financial Crisis and is best known for his doomsday predictions<\/a> for markets and the economy\u2014said he believes investors may still be pricing in a higher probability of a peace deal than is likely. In an op-ed for Project Syndicate, he pointed to several risks investors likely aren’t thinking about, including a bear market for stocks<\/a>, a global recession, and stagflation<\/a>, a situation where inflation spirals while growth slows.<\/p>\n

Roubini pointed to how the major stock indexes<\/a> had already climbed back to fresh records, despite no peace deal being inked. That’s likely because investors are anticipating a soon-to-come resolution and are betting that the growth benefits of AI will end up offsetting the economic impact of the war, he said.<\/p>\n

“If you believe that, you could be in for a rude awakening,” Roubini wrote. “If we do end up with escalation, that would lead to even more economic and market volatility and downside risks even in the best-case scenario.”<\/p>\n

Roubini laid out four scenarios he believed could happen next in the Iran war. <\/p>\n

1. A peace deal reopens the Strait of Hormuz<\/p>\n

\"Iran<\/p>\n

An Iran-flagged tugboat travels in the Strait of Hormuz.\u00a0<\/p>\n

Amirhossein KHORGOOEI \/ ISNA \/ AFP via Getty Images<\/p>\n

In this scenario, the US and Iran successfully negotiate a peace deal<\/a> and end the conflict. Iran reopens the Strait of Hormuz<\/a>, likely through a compromise on its nuclear program.<\/p>\n

“But this scenario is not very likely, because the regime can withstand economic pain far longer than Trump can (given the looming midterms),” Roubini said, pointing to how the US and Iran also looked like they were still “far apart” on key issues.<\/p>\n

“Settling even one of these would require long, complicated talks by serious, seasoned negotiators,” he added.<\/p>\n

Oil prices<\/a> would also likely remain “permanently” elevated in this scenario by around 15%-20% from pre-war levels, Roubini added, due to markets fearing the possibility of Iran closing the Strait again later in the future.<\/p>\n

2. Negotiations last for several more months while the Strait remains closed<\/p>\n

In this scenario, the ceasefire drags on for several more months as the US and Iran struggle to come to an agreement. The Strait of Hormuz remains closed, which could send oil prices<\/a> rising past their peaks earlier in the war.<\/p>\n

Global growth would also slow, while inflation would rise, giving the economy a stagflationary dynamic, he added.<\/p>\n

“This is basically where things stand today, and it is far from ideal,” Roubini said, adding that the scenario would only last for three months due to the situation being too unstable.<\/p>\n

“The status quo is inflicting significant economic and financial damage on the world economy, with oil and energy prices trending higher,” he added.<\/p>\n

3. The war escalates, Iran’s regime risks collapse<\/p>\n

\"Silhouette<\/p>\n

Brandon Bell\/Getty Images<\/p>\n

The US and Iran could escalate the conflict, “unleashing all the military, economic, and other means at their disposal,” Roubini said.<\/p>\n

The goal would be either to force Iran to surrender, such as by Iran accepting to stop its nuclear enrichment efforts and to reopen the Strait “unconditionally,” or to topple Iran’s regime entirely, he added.<\/p>\n

“This would be the best outcome for the US, Europe, Asia (including China), and the rest of the world,” Roubini said. “The risk, of course, is that the Iranian regime survives such escalation.”<\/p>\n

4. Soaring oil sparks a recession and bear market<\/p>\n

If conflict escalates, Iran could fight back hard by using its last military equipment to destroy more energy facilities<\/a> in the region while keeping the Strait of Hormuz closed.<\/p>\n

“Were that to happen, oil prices would spike closer to, or even above, $200 per barrel, and we would be looking at 1970s-style stagflation<\/a>, a global recession, and a bear market for equities,” Roubini said, adding that this scenario was the worst-case outcome.<\/p>\n

Markets remain hopeful about a peace deal with Iran, a development President Donald Trump has teased for weeks. Investors reacted positively to an Axios report this week that said the US and Iran were close to striking an official deal.<\/p>\n

Later, Trump threatened to take military action against Iran if it rejected the US’s proposal in a post on Truth Social. A top Iranian official also described Axios’ report as an “American wish list” on X, further muddying the market’s confusion.<\/p>\n","protected":false},"excerpt":{"rendered":"Investors betting that the Iran war is about to end could be in for a wake-up call, according…\n","protected":false},"author":2,"featured_media":103768,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[28451,36084,36085,177,36086,102,20412,34,15639,882,21386,15916,2967,1219,153],"class_list":{"0":"post-103767","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-iran","8":"tag-axios-report","9":"tag-bear-market","10":"tag-best-case-scenario","11":"tag-conflict","12":"tag-dr-doom","13":"tag-hormuz","14":"tag-investor","15":"tag-iran","16":"tag-nouriel-roubini","17":"tag-oil-price","18":"tag-peace-deal","19":"tag-recession","20":"tag-regime","21":"tag-strait","22":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@iran\/116538428842937965","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/103767","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/comments?post=103767"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/103767\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media\/103768"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media?parent=103767"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/categories?post=103767"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/tags?post=103767"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}