How the oil crises of 1973 and today differ
How the oil crises of 1973 and today differ newspress_en Wed, 09/30/2026 - 04:38 Business & Economy More than half a century ago, a decision to reduce oil production and suspend exports was enough to throw industrialised economies into disarray and redistribute power and wealth between producers and consumers. Today, however, the tap alone no longer determines the oil barrel's fate. The field may…
The oil crises of 1973 and those of today exhibit stark differences. In 1973, Arab producers opted to curtail supplies following a political decision. Conversely, in 2026, Gulf states are actively working to maintain oil flows amidst the ongoing US-Iran conflict, which has resulted in shipping disruptions and attacks on vital infrastructure and transport routes.
The International Energy Agency highlights the current maritime disruption as the most severe in oil market history in terms of daily losses. While the 2026 crisis has led to supply losses surpassing 14 million barrels a day, equivalent to approximately 13.6% of projected global demand in 2026, the 1973 embargo caused around 4.5 million barrels a day in the targeted nations.
Consequently, the 2026 shock is more than three times the magnitude of the 1973 embargo in terms of daily barrels lost.
However, price escalation patterns diverge significantly between the two crises. In 1973, oil prices surged from around $2.90 per barrel before the embargo to $11.65 in January 1974, nearly quadrupling. In contrast, during the present crisis, Brent crude climbed from $72.48 at the onset of the war to a peak above $126 in April, marking a nearly 74% increase.
Subsequently, prices softened when political tensions eased, only to surge again with each military escalation. As of September 22, Brent traded near $100 per barrel, approximately 38% above its pre-war level, driven by a resurgence in Saudi exports that helped temper prices. This does not diminish the severity of today's crisis; rather, it underscores the world's enhanced capacity to withstand it, owing to strategic oil reserves, production capacity beyond the Middle East, and economies consuming less oil relative to their output.
Additionally, Gulf producers have demonstrated the ability to swiftly redirect oil flows. Thus, today's price hikes stem primarily from rising insurance, ship-to-ship transfers, diesel, jet fuel, gas, and fertiliser costs, rather than the oil prices themselves. Consequently, if crude prices were to decline, energy and transport costs would persist at elevated levels.
The gas pumps at a supermarket in Lomme, near Lille, remained closed on November 30, 1973, due to a supply shortage during the 1973 oil crisis. Despite Gulf producers' enhanced ability to reroute oil, vulnerabilities remain. The ongoing battle for Hormuz serves as a critical test, as the US and Arabian Gulf countries leverage their influence to navigate these challenges.
Written by urgent.news from Al Majalla English's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
