BCA Research reports that the global economy has held up better than many expected following the closure of the Strait of Hormuz, but warns the current reprieve may be short-lived if the disruption persists.
Timing and a delayed impact - Chief Strategist Peter Berezin highlighted timing as the first reason for the economy's resilience. BCA notes that oil shocks historically affect GDP growth with a lag, typically inflicting maximum damage about four quarters after the initial shock.
Lower oil intensity of growth - The research house explains that the global economy now uses substantially less oil per unit of GDP than in past decades, which reduces the immediate drag from higher oil prices. BCA cautions, however, that this benefit is offset to some extent by greater interdependence across supply chains.
Anchored long-term inflation expectations - A third mitigating factor is that long-run inflation expectations remain well anchored, which limits the pressure on central banks to respond with aggressive interest-rate increases.
Fiscal offsets - Fiscal policy is providing some support. BCA points to measures from the One Big Beautiful Bill Act beginning to take effect alongside U.S. Treasury tariff refunds as partial offsets to the shock.
Precautionary corporate buying - Companies have increased precautionary purchases, a behavior that echoes patterns seen during the pandemic and that has supported demand in the near term.
AI-driven investment - The AI boom remains an important growth driver, with investment in IT hardware and software reaching a record 4.9% of GDP in the first quarter of 2026, according to BCA.
Oil market structure - Finally, BCA notes that oil markets are deeply backwardated, a structure that signals market participants expect the supply shock to be temporary rather than permanent.
BCA Research says these seven elements together have so far buffered the global economy from an immediate recessionary shock. Nonetheless, the firm is explicit that the situation could change quickly if the Strait of Hormuz remains closed into June - an outcome the research house says would meaningfully raise recession risk.
Equity stance - At present, BCA is neutral on global equities. The firm adds it "will adopt a more defensive posture" if the oil shock proves persistent.
Investors and market participants should weigh how sectors tied to energy, manufacturing and global supply chains may respond if the closure endures, while also monitoring central bank reactions and fiscal policy rollouts that BCA identifies as partial offsets.