A trader works on the floor of the New York Stock Exchange (NYSE) on March 23, 2026 in New York City, USA.
Brendan McDermid | Reuters
Citrini Research, the firm that rocked markets earlier this year with a provocatively pessimistic assessment of artificial intelligence, is issuing another warning – this time arguing that an oil-related slowdown could drag down stock prices.
Founder James van Geelen said persistently high energy prices could weigh on consumers and corporate profits, creating an environment in which stocks struggle even if the Federal Reserve eventually moves to cut interest rates.
“If the war doesn’t end, stocks will fall,” van Geelen wrote in a Substack post early Wednesday, pointing to geopolitical tensions as a key factor in oil’s continued strength.
Stocks recouped some of their losses on Wednesday after reports that the U.S. has presented Iran with a plan to end the conflict, causing crude oil prices to plunge. However, the two countries appear to be very far apart, with Tehran rejecting the US ceasefire offer and demanding sovereignty over the Strait of Hormuz.
The latest call builds on Citrini’s growing reputation for contrarian macro views. In February, the company released a widely circulated note arguing that the AI boom itself could ultimately harm the economy and drive unemployment to as much as 10% if employees were replaced by machines.
Is a slowdown imminent?
The core of Citrini’s current thesis is that elevated oil prices act like a tax on growth, eroding purchasing power and tightening financial conditions without requiring further action from the Fed. With interest rates already close to neutral, van Geelen argued that simply keeping interest rates constant while the energy shock grips the economy would be restrictive enough.
“We live in a different world now, interest rates are near neutral,” he wrote. “If oil prices remain high, it would be restrictive enough to simply leave them there while oil prices filter through the rest of the economy and cause a slowdown.”
That dynamic makes stocks particularly vulnerable, he said. Even in a scenario where geopolitical tensions quickly ease, Citrini sees limited upside potential for stocks. Consumers would still emerge “somewhat weaker” after absorbing higher fuel costs, dampening the strength of any recovery, he said.
The company’s view also challenges the common bullish narrative that rate cuts would provide support for stocks. Instead, van Geelen suggests that any easing would likely come in response to deteriorating growth, a backdrop that has historically been associated with further stock declines rather than sustained rallies.
“The Fed knows that raising interest rates will not magically lead to an increase in oil supply,” he wrote, arguing that policymakers would be more likely to “see through” the shock before eventually cutting rates if conditions worsen.
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