The oil crises of the 1970s prompted a range of policy changes that still exist today. For one, we invented the high occupancy vehicle (HOV) lane to incentivize workers to carpool. A nationwide 55 mph speed limit made sure those carpools weren\u2019t guzzling too much gas. Cars became more fuel efficient; we (temporarily) started driving less. But some experts say those measures, coupled with those taken during the 2022 energy shock in the wake of Russia\u2019s invasion of Ukraine, pale in comparison to what we\u2019re about to see next thanks to the Iran war.<\/p>\n
Earlier this month, the Paris-based intergovernmental agency International Energy Agency (IEA) released a record-breaking 400 million barrels of oil<\/a> to temper rising prices. IEA executive director Fatih Birol, who coordinated the release, finally broke his three-week silence and sounded the alarms on how much damage the war is causing. In an interview<\/a> Monday at the National Press Club of Australia, Birol said world leaders are underestimating the energy crisis, saying the ongoing energy shock is worse than previous ones.\u00a0<\/p>\n \u201cThe depth of the problem was not well appreciated by the decision makers around the world,\u201d he said. \u201cIf you want to put in a context, this crisis as it stands now: two oil crises and one gas crisis put all together,\u201d he said.<\/p>\n Even as President Donald Trump said early Monday the U.S. was in talks with Iran\u2014and would therefore withhold from striking critical energy sources for the next five days\u2014Brent crude last week soared north of $110 per barrel. After the president\u2019s announcement, oil prices fell about 10%, yet remain stubbornly high at about $102 as of 12 p.m. ET<\/a>. Economists expect the oil shock to reverberate across the U.S. economy, potentially jacking up food prices, jeopardizing<\/a> the possibility of a Fed rate cut this year (while raising the odds of a rate hike), and even threatening to halt<\/a> the entire economy if oil prices rise to $140 a barrel.<\/p>\n The 1970s plus the Ukraine War<\/p>\n Birol elaborated on the numbers behind his assertion, saying the losses already accrued are far worse than those from the 1970 oil crises and the Ukraine war.\u00a0<\/p>\n \u201cMany of us remember the two consecutive oil crises in [the] 1970s: 1973 and 1979,\u201d he said. \u201cIn each of the crises, the world has lost about 5 million barrels per day, both of them together 10 million barrels per day.\u201d<\/p>\n \u201cAnd today, only as of today, we lost 11 million barrels per day, so more than two major oil shocks put together.\u201d<\/p>\n He added that after Russia\u2019s invasion of Ukraine the gas markets, particularly in Europe, \u201clost about 75 billion cubic meters, 75BCM. And as of now, as a result of this crisis, we lost about 140BCM, almost twice\u201d as much.<\/p>\n