Sunday, March 1, 2026 at Pump Jack near Driscoll, Texas, USA.
Eddie Seal | Bloomberg | Getty Images
Prediction market investors are increasingly predicting that the U.S. economy will slip into recession this year due to soaring oil prices.
The Kalsi market on whether the U.S. will enter a recession in 2026 rose above 34% on Monday, its highest level since November, according to the platform’s data. Late last week, the market was pegging the chance of that outcome at less than 25%.
Monday’s increase in recession probability followed a dramatic rise in U.S. oil prices to more than $100 per barrel. The last time oil prices exceeded that level was in the aftermath of Russia’s invasion of Ukraine in 2022.
Producers in the Middle East have cut production in recent days, raising concerns about supplies after the crucial Strait of Hormuz was closed due to the war between the United States and Iran. west texas intermediate Last week, oil prices recorded their biggest jump on record as the conflict escalated.
WTI, 5 years
Economists and analysts have warned that the economy could face serious consequences if oil prices remain above this milestone, as rising gas and fuel prices hit consumer and business spending. A spike in oil prices on Monday prompted a slide in stock prices, suggesting more pain is ahead for investors after a tumultuous week.
Other Kalsi market bettors predicted an 11% chance of the next U.S. recession starting in the first quarter of this year. Polymarket bettors predict a 31% chance of a recession by the end of this year.
Calsi participants believe there is a 60% chance that U.S. gasoline prices will exceed $4 this month due to rising oil prices. The national average for regular gasoline on Monday was $3.48, according to AAA.
Please note that for this Kalsi market, a recession is defined as two consecutive quarters of negative gross domestic product (GDP) growth. This differs slightly from the more general National Bureau of Economic Research’s formal recession designation, which is based on a “substantial decline in economic activity” that is widespread and lasts for more than a few months.
