In the 1960s, the Nifty Fifty era, investors only want to invest in large-cap growth stocks. They became known as "one-decision" stocks because investors were told that they could buy and hold them forever.

The result was a decade of underinvestment in the energy sector.

The same pattern played out in the 1990s when energy went underinvested while investors only had eyes for dot-com stocks and then again in the 2010s with the craze for FANG stocks.

Both the 70s and 90s market craze ended with energy prices soaring. However, when the energy crisis popped the bubble, investment started flowing into energy, resulting in a much-needed boom in oil-field CAPEX.

Today, we started seeing more CAPEX flowing into the energy sector compared to 5 years ago. But for various reasons

— Public Policy on environmental conservation
— ESG mandates
— Stock Indexing
— Harder to get funds from both capital market and financial institutions

Energy companies are not investing as they did in the 1970s and 2000s.

This time, the supply of oil is not going to be solved as quickly as we expect. Not to mention that energy is not the only issue, de-globalization, reshoring, shrinking labor supply, changes in the global supply chain, etc.

These are the factors that could continue to push up inflation and supply-side drivers of inflation that can only be offset by investment, which is not going to happen when capital is scarce during this tightening environment.

In short, things are going to get worse until the policy are changed.