Can the World Handle Another Oil Crisis? Comparing Today’s Tensions with Past Energy Shocks- Even with all the talk of electric cars, solar panels, and going green, oil is still the engine of the global economy. It fuels not just cars and planes, but also industries, shipping, agriculture, and more. That’s why every time the world faces political or military trouble in oil-producing regions, global markets hold their breath.
Today, with growing conflicts across the Middle East, Russia’s continued involvement in Ukraine, and tensions in Asia, many are wondering: Can the world really handle another oil crisis? To answer that, let’s take a look at how we’ve dealt with oil shocks in the past—and whether we’re any better prepared now.
The First Wake-Up Call: The 1973 Arab Oil Embargo
The 1973 oil crisis didn’t just cause higher prices at the pump—it was a wake-up call for the entire world. Arab nations, angry at Western support for Israel during the Yom Kippur War, decided to weaponize oil. They cut off supplies to the U.S. and its allies, leading to:
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A quadrupling of oil prices.
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Long queues at gas stations in the U.S. and Europe.
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Economic recessions, with inflation soaring worldwide.
That crisis made governments realize that depending too heavily on foreign oil was risky. It also led to the creation of strategic oil reserves, efforts to improve fuel efficiency, and early interest in alternative energy sources.
The Sequel: The 1979 Iranian Revolution and Oil Panic
Just six years later, another shock arrived. The Iranian Revolution toppled the Shah’s regime, and oil production collapsed. Though the actual reduction in supply was small, fear drove prices through the roof.
The global economy was already shaky after the ’73 shock, and this second crisis:
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Triggered another major recession.
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Made energy a security priority for many nations.
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Launched new pushes for domestic oil production in countries like the U.S., the U.K., and Norway.
The Iran-Iraq War: The Long, Slow Burn of the 1980s
By the 1980s, conflict again struck the Middle East with the brutal Iran-Iraq War. Oil tankers were attacked in the Persian Gulf, making the entire region unstable for shipping. Western navies, especially the U.S., had to escort commercial ships to keep trade moving.
The constant sense of threat kept oil markets unstable. The message was clear: any war in the Persian Gulf had global consequences.
Gulf War 1990: Saddam, Kuwait, and Burning Oil Wells
In 1990, Saddam Hussein invaded Kuwait, one of the world’s top oil producers. The invasion sent oil prices soaring overnight, and fears mounted that Iraq might threaten Saudi Arabia next.
Although a swift U.S.-led military response pushed Saddam out, the retreating Iraqi forces set Kuwaiti oil wells on fire, creating massive environmental damage and supply disruptions.
By this point, energy security wasn’t just a phrase—it was military policy for many countries.
Fast Forward to Today: What’s Different?
So here we are in 2025. Conflicts are brewing once again:
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Iran threatening to close the Strait of Hormuz—the world’s busiest oil shipping lane.
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Houthi attacks on ships in the Red Sea, pushing oil and shipping costs higher.
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Russia’s war in Ukraine, adding stress to both oil and natural gas markets.
But is the world better prepared now than in the 1970s? Yes and no.
Why We’re Better Prepared
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Strategic Oil Reserves
Most major economies now hold weeks or months’ worth of emergency oil reserves, ready to release supplies if crises hit. -
Diversified Supply
Countries have worked hard to buy oil from multiple sources. The U.S., for example, now produces more oil domestically than it imports. -
Growing Renewables
Solar, wind, and electric vehicles have started to reduce some dependence on oil, though we’re not there yet. -
Alternative Shipping Routes
If chokepoints like the Suez Canal or Strait of Hormuz are blocked, ships can go around Africa. It’s more expensive, but it keeps supplies moving.
Why We’re Still Vulnerable
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Global Demand Is Still High
Despite the rise of renewables, global demand for oil remains huge, especially in developing nations like India and China. -
Oil Prices Affect Everything
Higher oil prices don’t just hit drivers—they increase the cost of shipping goods, producing plastics, fertilizers, and even clothing. -
Financial Market Panic
Even small disruptions can send financial markets into panic mode, making economies shaky. -
Politics Is Still Unpredictable
Energy markets are still vulnerable to political fights, military escalations, or sudden sanctions.
How Today’s Tensions Compare with the Past
So, does today’s situation feel like 1973? Or is it more like 1979? Maybe it’s a mix of both.
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Like 1973, we have Middle Eastern conflicts threatening supply lines.
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Like 1979, internal instability in countries like Iran could cause major supply problems.
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Like the 1980s Tanker War, we already see attacks on shipping lanes by regional actors like the Houthis.
What makes today more complicated is that we’re also juggling climate goals, renewable transitions, and global economic slowdowns—all while trying to avoid new wars.
Can the World Handle It?
The short answer? Probably—but not without pain.
Even with better preparation, a major oil crisis would hit consumers hard, especially in countries that rely on imports. Fuel prices could spike, inflation could rise again (like we saw in 2022), and supply chains could face new delays.
Governments would likely respond by:
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Releasing strategic reserves.
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Negotiating new energy deals.
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Possibly fast-tracking renewable projects as a long-term fix.
But make no mistake—the world economy is still sensitive to oil shocks.
Preparing for the Next Big Shock
History has taught us that oil and global stability go hand in hand. Every major conflict since the 1970s has proven how vulnerable we are to disruptions in energy supply. While we’ve taken steps to protect ourselves, we’re still walking a tightrope.
Can the world handle another oil crisis? Maybe. But it’s going to take smarter energy strategies, stronger global cooperation, and a serious push toward energy independence—not just from the Middle East, but from fossil fuels altogether.
Until that day comes, we’ll all be watching the headlines—and the fuel prices—very closely.