Private credit caught between an oil shock and an AI boom

Fitch cut its 2026 global growth forecast to 2.4%. The downgrade, two-tenths of a point, traces to the oil shock from the US-Iran war. The same outlook raises China to 4.6% and lifts Korea on the strength of the AI investment boom. US growth falls to 1.9%. The eurozone takes a deeper cut, to 0.9%. Fitch's base case treats the oil shock as less severe than the 1970s, but it is a shock nonetheless. Private credit gets both forces at once: an input-cost squeeze across the book, and a concentrated pocket of growth tied to AI capital spending.

Oil is where the credit risk sits. Fitch figures crude at $87 a barrel for 2026. That is up from $70 in March. The Strait of Hormuz has been closed for 13 weeks, and Fitch expects it to reopen in July. Higher fuel and input costs are eating into middle-market cash flow. After the post-pandemic inflation spike, central banks are in no mood to loosen. Fitch sees the Federal Reserve and the Bank of England holding rates this year and cutting in 2027. For floating-rate borrowers, coupons stay high and debt service stays costly.

The growth is coming from AI. Global semiconductor sales rose 80% in March from a year earlier. US IT investment grew 18% in the first quarter. US capital goods imports jumped nearly 30% in March. Fitch credits the boom with supporting world trade and lifting Korean and Taiwanese GDP in the first quarter. New lending demand is likely to stay strongest in deals tied to the AI capital-spending cycle. The rest of a private-credit book, in effect, faces the oil shock that produced the downgrade. For lenders, the forecast says to underwrite the difference, not the average.