By Frances Yue
'I would have a hard time seeing markets just shrugging that off', says Evercore founder Roger Altman
Evercore founder Roger Altman was interviewed on CNBC on Monday.
&#34;I think the big question of the moment ... is whether we're now at a tipping point in terms of the oil market and whether we're about to see over the next two weeks, really substantially higher oil prices.&#34;
That was Roger Altman, founder and senior chairman of Wall Street investment bank Evercore, warning that oil prices could soon create more problems for a stock market that has proved remarkably resilient so far.
Altman said in a CNBC interview on Monday that a sharp rise in crude could destabilize markets by triggering &#34;the second big inflation shock of this decade after COVID,&#34; especially if oil prices climb toward $150 a barrel or higher.
In that case, &#34;I would have a hard time seeing markets just shrugging that off,&#34; Altman said, adding: &#34;But maybe they will.&#34;
Oil prices pushed higher on Monday after President Donald Trump wrote on Sunday that the &#34;Clock is Ticking&#34; for Iran. Iran had &#34;better get moving, FAST, or there won't be anything left of them,&#34; he said on Truth Social then. Brent crude oil (BRN00) rose 1.4% to above $110 a barrel on Monday, while West Texas Intermediate crude (CL.1) went up 1.3% passing $106 a barrel, according to FactSet data.
Stocks have taken higher oil prices in stride so far. With the S&amp;P 500 SPX and Nasdaq composite COMP trading in record territory as recently as last week, investors are betting that corporate earnings, AI spending and a still-solid economy can continue to support the market. But a sustained oil-price shock could test that view.
While investors have largely treated the latest energy-driven inflation pressures as temporary, the buffers that had helped absorb the shock from lost oil supply may be fading, Evercore's Altman said.
He noted that 12 million to 14 million barrels a day have been taken out of the oil market, compared with the average daily global consumption of about 102 million barrels. So far, the impact has been softened by stored oil inventories, tankers already at sea, releases from strategic petroleum reserves and large inventories in China. In other words, the market has had backup supplies to draw on.
But those buffers have been reduced, he said, and may soon lose their ability to cushion the market from the full impact of the supply shortfall.
It would complicate what Altman described as an otherwise strong backdrop for the U.S. economy. Altman said the conditions for markets and the economy looked very strong before the potential hit from higher oil prices, pointing to corporate profits, consumer resilience, and business investment, with much of that investment centered on AI, but not limited to AI.
The problem is that oil may now overwhelm those positives, Altman said.
Crude has become the &#34;linchpin&#34; for markets, according to Altman. If the U.S. were to reach some accommodation with Iran and oil prices fell back toward $70 to $80 a barrel by the end of the year, the economy and markets would be &#34;in good shape,&#34; he noted.
&#34;But at the moment it looks like the opposite is going to happen, and that's risky,&#34; Altman added.
-Frances Yue
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05-18-26 1210ET

Evercore founder Roger Altman warns that the oil market may be at a tipping point, potentially leading to significantly higher prices that could destabilize the stock market. He highlights that a rise in crude oil prices towards $150 a barrel could trigger a second inflation shock post-COVID. While stocks have remained resilient, the diminishing buffers against oil supply shortfalls may complicate the economic outlook, which has otherwise appeared strong due to corporate profits and consumer resilience.

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The oil market is reaching a 'tipping point' that could create problems for stocks, according to this Wall Street legend