Today, the 32-member countries of the International Energy Agency unanimously approved a coordinated emergency oil release of 400 million barrels, the largest in its 52-year history. The effective closure of the Strait of Hormuz has removed approximately 20mbd of oil from the global market. That implies the IEA is providing 20 days' worth of relief oil supplies and that the group expects a short war. The price of a barrel of Brent crude oil is up about $6.50 this evening to $98.68, suggesting the market doubts a short-war scenario.
We started to doubt a short-war narrative three days after the war began. We are now starting to worry more about the stability of the private credit market if the oil shock persists and weakens the US economy. By some estimates, at a sustained crude oil price of $100 per barrel, the "Oil Tax" would wipe out the increase in tax refunds attributable to last year's One Big Beautiful Bill Act (OBBBA).
As of March 2026, the private credit market has reached approximately $2 trillion in assets under management. While institutional demand remains the bedrock, retail wealth channels (via semi-liquid "evergreen" funds and BDCs) now account for nearly a third of the US direct lending market. While defaults remain low, they are rising and getting media attention. As a result, withdrawals are also increasing among retail investors, raising the risk of a credit crunch.
Market jitters are increasing with warnings from people such as Lloyd Blankfein and Jamie Dimon. In a series of interviews this month, including appearances on Bloomberg’s Big Take podcast and CBS Sunday Morning, Blankfein has said that the market is due for a "reckoning." He has also compared it to the pre-2008 period.
In one of his most widely quoted recent warnings, Dimon addressed the sudden defaults of several private-credit-backed firms (like Tricolor and First Brands): "My antenna goes up when things like that happen. I probably shouldn't say this, but when you see one cockroach, there’s probably more."
