What if an oil-price crash cuts reserve-based lending and drives shale-borrower defaults?
An oil-price crash forces redeterminations that cut reserve-based lending facilities, driving defaults among shale borrowers and losses at energy-exposed banks.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (gold) over time vs the crowd's (Polymarket, blue), from the past toward the 1–3 years horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a risk-off shock. An oil-price crash forces redeterminations that cut reserve-based lending facilities, driving defaults among shale borrowers and losses at energy-exposed banks. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Oil supply risk ▼ · Recession signal ▲ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | Brent crude BRENTon Hyperliquid 📈 chart | Commodity | ▼ -1.8% hist -7.17–-0.02% · other way +0.38% (n=9) |
| 2 | WTI crude CLon Hyperliquid 📈 chart | Commodity | ▼ -1.6% hist -3.41–+0.26% · other way -2.51% (n=10) |
| 3 | Energy sector XLEon Hyperliquid 📈 chart | Equity | ▼ -1.1% hist -1.89–+0.18% · other way -0.05% (n=10) |
| 4 | United Airlines UAL 📈 chart | Equity | ▲ +0.9% hist -0.53–+2.35% · other way +23.68% (n=9) |
| 5 | High-yield credit HYG 📈 chart | Rate | ▼ -0.6% hist -0.43–-0.09% · other way +0.34% (n=9) |
| 6 | ExxonMobil XOM 📈 chart | Equity | ▼ -0.8% hist -0.99–-0.02% · other way +0.86% (n=12) |
| 7 | Chevron CVX 📈 chart | Equity | ▼ -0.7% hist -1.55–+0.28% · other way -1.0% (n=12) |
| 8 | Delta DAL 📈 chart | Equity | ▲ +0.8% hist -0.83–+3.89% · other way +16.57% (n=9) |
| 9 | Financials XLF 📈 chart | Equity | ▼ -0.5% hist -1.77–+0.25% · other way +1.91% (n=10) |
| 10 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -0.4% hist -1.65–+0.4% · other way -5.21% (n=10) |
| 11 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.3% hist -1.31–+0.65% · other way -0.62% (n=11) |
| 12 | JPMorgan JPM 📈 chart | Equity | ▼ -0.3% hist -2.3–+0.24% · other way +8.65% (n=11) |
| 13 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.3% hist -0.83–+0.23% · other way +0.54% (n=12) |
| 14 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.3% hist -2.89–+1.45% · other way -4.59% (n=6) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 35 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| BRENT BRENT | SHORT | -5.1% · 5d -3.6% | 81% | 26 | 0.55 | ✓ matches cascade |
| JPM JPM | SHORT | -1.8% · 5d -2.0% | 74% | 34 | 0.42 | ✓ matches cascade |
| SOL SOL | SHORT | -10.2% · 5d -12.6% | 83% | 6 | 0.42 | ✓ matches cascade |
| 10y yield DGS10 | SHORT | -18bp · 5d -4bp | 69% | 35 | 0.34 | ✓ matches cascade |
| XLF XLF | SHORT | -1.4% · 5d -1.4% | 67% | 30 | 0.31 | ✓ matches cascade |
| Bitcoin BTC | SHORT | -2.8% · 5d -4.1% | 67% | 12 | 0.30 | ✓ matches cascade |
| CL CL | SHORT | -2.4% · 5d -3.0% | 67% | 30 | 0.29 | ✓ matches cascade |
| 30y yield DGS30 | SHORT | -16bp · 5d -3bp | 65% | 34 | 0.28 | ✓ matches cascade |
| DAL DAL | LONG | +3.2% · 5d -0.9% ↺ fades | 63% | 27 | 0.25 | ✓ matches cascade |
| MSTR MSTR | SHORT | -1.3% · 5d -4.2% | 60% | 30 | 0.15 | ✓ matches cascade |
| Volatility VIX | SHORT | -1.4% · 5d +0.1% ↺ fades | 58% | 31 | 0.15 | ⚠ differs |
| COIN COIN | LONG | +4.8% · 5d +9.3% | 60% | 5 | 0.15 | ⚠ differs |
| US dollar DXY | LONG | +0.5% · 5d +0.2% | 57% | 35 | 0.13 | · |
| Gold XAU | LONG | +0.9% · 5d -0.2% ↺ fades | 57% | 30 | 0.12 | ✓ matches cascade |