The U.S. economy has shown remarkable resilience in the first 50 days of the Iran war. The S&P 500 and the Nasdaq stock indices have touched record highs, payrolls rose by 178,000 in March, and consumers continue to spend. For all the optimism, the rise in crude oil prices this year could reveal some lurking risks. 

This is one of them: higher energy prices will absorb more money from the paychecks of leveraged consumers, some of which were already showing stress before the Iran war.  

Delinquency rates were rising in several consumer credit channels before the spike in oil prices. In unsecured personal loans – which are often used to consolidate debt – the 60-plus days past due delinquency rate rose to 3.99% in the fourth quarter of 2025 from 3.57% a year earlier, according to Transunion, the global credit reporting agency. In auto loans, 60-plus daydelinquencies tracked by Fitch, the rating agency, climbed to 6.74% for subprime borrowers in the second half of 2025, up from 6.15% a year earlier. 

Consumer Finance Stocks

Despite forecasts for continued demand for personal loans and mortgages this year, the oil shock has investors backing away from stocks with consumer finance exposure. OneMain Financial’s shares are down about 13% this year through April 23. Ed Najarian, a financial institutions analyst at Bloomberg Intelligence, expects OneMain’s loan charge-offs will be higher this year than the consensus estimate of 7.5%. “Higher oil is going to affect their clients’ ability to repay loans.’’  

Shares of Capital One Financial, which has a large consumer banking business, are down 19%. Shares of Sofi Technologies are down 30%, and shares of Lending Tree are down 11.5%. By comparison, the KBW Bank Index is up 3.25% this year through April 23. 

Nobody is predicting a financial wildfire from defaults and delinquencies on risky household credits. But investors see a plausible risk that the spike in energy costs could make it difficult for some households to pay their debts. Here is our analysis of how higher energy costs impact U.S. incomes. 

Income Bite

Low-to-middle-income households spend more on energy. Energy expenditures for the bottom five decilesrange from 12.3% to 9%, and decline to about 4.5% forthe highest decile. 

It is difficult to predict what the average price for spot Brent crude oil will be for the full year. So far, the average price this year is 28.6% higher than the average price for 2025. 

We find that a 40% increase in oil prices, and assuming significant pass-through into other goods and services, produces the following cost to disposable income across the bottom four deciles: 5.6%, 5.0%, 4.6%, and 4.3%, starting from the lowest decile, and 2.6% and 1.6% in the highest two deciles, respectively.  

In plain numbers, a 5% additional transfer of disposable income to energy producers for someone making $80,000 is $4,000. 

Dire Scenario

A more dire scenario would be a sharp slowdown in the economy that raises unemployment, which Morningstar’s Michael Miller calls “the number one driver’’ of loan delinquencies and charge-offs. Miller is a stock analyst covering consumer banks and finance companies for Morningstar Inc. 

But right now there is no consensus forecast for a U.S. recession. So why are investors so worried about consumer credit companies? One answer could be the increasing probability of negative surprises. 

Charles Calomiris, a senior scholar at the Andersen Institute, said it isn’t just an uptick in the level of charge-offs that matters. It is the volatility of delinquencies that changes bankers’ attitudes about risk. “It is the sudden change, not just the high level that matters,’’ he said in an interview. He says that financial firms typically retract from risk-taking at these moments.   

Maybe this is the biggest risk scenario for the U.S. economy that has investors worried: Delinquencies this year are higher than investors expected. Loan officers pull back on risk, wrenching down credit and slowing an economy that is already somewhat hobbled by higher energy costs.  

“Negative shocks to loan performance cause banks to cut loan supply,’’ Calomiris said. “Bank lending is inherently pro-cyclical.”