The world economy is experiencing the most severe oil shock in decades. The worst could still be on the way.
Surging oil prices continue to ripple through the global economy because of the war with Iran. Now, some analysts say the worst could still be ahead as the conflict drags on.
The concern is that beyond immediate knock-on effects from rising gasoline prices, the war’s disruption could come in waves — ones that will play out over weeks and months and leave few parts of the global economy untouched.
“We haven’t seen the brunt of it yet,” said Samantha Gross, director of energy security and climate at the Brookings Institute. “I feel like markets are so far underestimating the effect of the war. It seems that they expect this war to go quickly, and they expect that we can go back to the world before when it’s over. And I don’t think either of those ideas is true.”
The warning signs are already here. The global oil price benchmark, Brent crude — which heavily influences U.S. gasoline prices — briefly topped $119 a barrel last week, the highest since the war began and a level last seen in July 2022 amid the pandemic-era inflation wave. As of Monday, Brent prices had settled at about $113 a barrel.
https://finance.yahoo.com/sectors/energy/articles/world-economy-experiencing-most-severe-172213126.html
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Yo mama
The first shortage was caused by the oil embargo when the (mostly Arab) oil-exporting countries held back production to choke us. It was at least a few years before we got over that severe shortage. That was during Nixon's 2nd term.
The embargo necessitated the odd-even rationing. There were long lines at the gas stations, people waiting in line for hours to top off their tanks. Many independent gas stations went out of business because they didn't have a way to refill their pumps. We had odd-even days. If your license plate ended in zero-2-4-6-8 you could only purchase gas on "even" days of the month. If your license plate ended in an odd number (1-3-5-7-9) then you could only purchase gas on "odd" days of the month. (They had a rule about license plates with no numbers also.)
The 2nd crisis happened in 1979 when Iran took 66 hostages from the American embassy in Tehran. Immediately Carter stopped all imports of oil from Iran, and it created severe oil/gas shortages for a year, but I don't think we had the odd-even rationing then. Can anyone remember? There were long lines at the gas stations again, but the odd-even plan didn't seem to make much difference so they didn't do it a 2nd time.
My point is that things were WAY WORSE in the 1970s than they are now. We have more options (such as fuel efficient cars) and we aren't as dependent on a small number of suppliers like we were then.
