‘Misplaced euphoria’: Markets are sleepwalking into a recession amid Iran war oil price shock

Global economies could be "sleepwalking" into a "big recession", as investors continue to underplay the impact of the oil price shock, Amrita Sen, founder and director, market intelligence at Energy Aspect, told CNBC's "Squawk Box Europe" on Monday. The S&P 500 hit a new all-time intraday high last week, with the broad market index touching 7,230.12 on May 1. That's despite a surge in the cost of energy caused by the war in the Middle East — with oil prices soaring more than 50% since the U.S.-Iran conflict began on Feb. 28. "This has been the biggest conundrum for us — if anything, we think oil should be higher and the equity market should be a lot, lot weaker," Sen said. "I think we're sleepwalking into potentially a pretty big recession." Sen said there is an "extremely misplaced euphoria" among many investors, who she believes are continuing to dismiss the ongoing energy squeeze as an issue affecting mainly Asian economies. OPEC has pledged to ramp up its oil production, though Sen cautioned that this increase remains largely symbolic and falls short of what is needed to replace lost supply. 'Massive energy crisis' "The story is really when Hormuz reopens, and at what capacity and what pace it reopens," she noted. "If you assume that the Strait remains disrupted for a longer period of time, you are saying that we all need to go back to 2013 demand levels, about 10 million barrels per day less… we've added a billion more people. …