Philippe Aghion Highlights France's Economic Resilience Amid Middle East Conflict and Oil Price Surge

Nobel laureate economist Philippe Aghion offered an in-depth analysis on March 9, 2026, of the French economy's response to the blockade of the strategic Hormuz Strait by Iran and the resulting spike in oil prices. Speaking on RTL, Aghion warned that the disruption, which threatens almost one-fifth of the world's oil supply, has triggered rising fuel costs in France and could lead to a resurgence of inflation coupled with a slowdown in economic growth. However, he emphasized that he does not foresee a collapse akin to the 2008 financial crisis.

Aghion highlighted France's economic resilience, attributing it to the country's automatic stabilizers that support consumption and small to medium-sized enterprises during downturns. These mechanisms position France to better withstand recessionary pressures compared to other nations.

He cautioned that if the conflict persists beyond four to five months and oil prices surpass $150 per barrel, the consequences could resemble the 1973 oil shock, requiring coordinated responses among European countries, the United States, and Canada. Despite the growing risks, Aghion advised against immediately freezing fuel prices or lowering VAT, suggesting such interventions should only be considered if the situation worsens significantly.

Additionally, he firmed his stance on maintaining sanctions against Russia, underlining their importance in international messaging. Aghion also praised France's decision to continue its nuclear energy program amid the crisis, stating, "France has been right not to stop or follow Germany in halting its nuclear program."

His analysis underscores the complexities facing the French economy amid geopolitical tensions and energy market volatility but confirms its capacity to manage risks without catastrophic downturns.