As crude whipsaws around the US$100 mark on every headline coming out of the Gulf, credit investors face an uncomfortable question. At one point crude had almost doubled from its late-2025 lows, and the intuitive expectation would be for credit spreads to widen (higher oil prices mean higher costs and less cash flow to service debt).
But for much of the last 15 years, this link has been masked by broader economic recoveries that kept spreads tightening even as oil rose. Our research into 22 historical episodes suggests that in today’s tight-spread environment, that cushion no longer exists.
