The turmoil engulfing banks, including Credit Suisse Group AG, threatens to curb U.S. oil and gas production, sowing the seed for future imbalance, according to a Pimco managing director.

The combination of tightening credit conditions and lower energy prices has the potential to constrain U.S. driller spending, or lead OPEC+ to review their output targets, “altering the forward outlook for oil and gas supplies in a non-trivial way,” Greg Sharenow, who manages a portfolio focused on energy and commodities at Pacific Investment Management Co., said in an interview Wednesday.

U.S. oil futures plunged to levels not seen since December 2021 on Wednesday as worries over the fate of Credit Suisse, following the collapse of some U.S. banks, fueled fears of a financial crisis. The drop comes at a time when U.S. producers, reaping an unprecedented cash bonanza, have opted to spend more on dividends and share buybacks than on capital projects.

“At these price levels, one would expect to see the U.S. no longer grow,” Sharenow said. Energy traders are still contending with assessing the risk of a potential recession and its impact on demand for energy and other commodities, he added. “That’s probably the first-order biggest issue.”