No Shale Cushion Means This Energy Shock Hits Consumers Harder

UBS chief economist Arend Kapteyn argues the current energy shock is not like 2011–14 because US shale is far less responsive to price increases, leaving little offset from investment to cushion consumers. With shale investment weaker and officials framing the shock as temporary, the pain from higher energy costs is more likely to hit consumer purchasing power, while geopolitical disruptions in the Gulf threaten to tighten markets further and risk a pump-price shock.