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We are at risk of an energy crisis worse than the two oil crises in the 1970’s combined.
We all remember how the cost of energy skyrocketed following Russia’s invasion of Ukraine just a couple of years ago.
Looking back, however, many will probably remember the oil crises of the 1970’s as a strak warning of how bad things can get.
The two consecutive crises occured when the Western world faced substantial petroleum shortages following the Yom Kippur War in 1973 and the Iranian Revolution in 1979.
The current war in Iran has already made oil prices jump, and the war is not over yet.
And the executive director of the International Energy Agency (IAE), Fatih Birrol, warns that the world could now be facing an energy crisis worse than the two crises from the 1970’s – combined.
11 mio. barrels of oil per day
Speaking to Australian media at a press event in Canberra, Birol explained that during the two crises in the 70’s, the world lost approx. five mio. barrels of oil per day, meaning the two crises together cost the the world ten mio. barrels of oil per day, Reuters reports.
“As of today, we lost 11 million barrels per day, so more than two major oil shocks put together,” Birol said, speaking about the current war in Iran.
No country is immune
Part of the reason for the increasing oil prices is that Iran has effectively closed off the Strait of Hormuz, through which roughly 20% of all global oil trade and the same amount of liquified natural gas.
On March 14, more than 30 nations decided to flood the oil market with 400 million barrels of oil from emergency reserves, but analysts fear this will only help in the short run.
And if the current situation continues to evolve, and a full-blown energy crisis, no country “will be immune”, Fatih Birrol warned.
Sources: Reuters, BBC, CNBC
