How did historical oil crises end?

- On October 6, 1973, the Fourth Middle East War (Yom Kippur War) broke out. Arab countries including Egypt and Syria launched a military offensive to reclaim territories occupied by Israel. - On October 16, 1973, Kuwait, Iraq, Saudi Arabia, Qatar, the United Arab Emirates, and Iran decided to raise the posted price of crude oil in the Gulf region by 17%, firing the first shot of the 'oil weapon'. - On October 17, 1973, the ministerial meeting of the Organization of Arab Petroleum Exporting Countries (OAPEC), attended by ten countries including Algeria, announced an immediate cut in oil production—reducing output by 5% per month from the September baseline—and a monthly 5% reduction in oil supplies to countries supporting Israel’s aggression, notably the United States. - Starting October 18, 1973, major Arab oil producers—including Abu Dhabi, Saudi Arabia, and Libya—successively announced embargoes on oil exports to the United States, launching a full-scale oil embargo. - By 1974, crude oil prices had surged from under $3 per barrel before the crisis to over $13 per barrel, triggering severe global oil shortages. Aftermath: · Economic impact: Triggered stagflation across the capitalist world, causing sharp recessions in the U.S., Western Europe, and Japan. The U.S. declared a national emergency and implemented energy-saving measures such as production limits and rationing. · Political impact: Broke the West’s monopoly over international oil production and trade; OPEC evolved from an economic organization into a core global political force. For the first time, Arab states successfully wielded oil as a political instrument, fracturing the U.S.–Europe–Japan alliance. · Energy security impact: Spurred Western nations to prioritize energy security—the International Energy Agency (IEA) was established in 1974, countries began building strategic petroleum reserves, and diversified energy pathways were explored. · Geopolitical impact: Cemented the petrodollar system. The U.S. and Saudi Arabia reached an agreement to denominate oil trade exclusively in U.S. dollars, reinforcing the dollar’s global monetary hegemony. The Second Oil Crisis occurred from 1979 to 1980. - In November 1978, nationwide strikes in Iran halted operations at oil refineries, slashing oil production from 6 million barrels per day to just 1.5 million barrels per day, marking the onset of supply disruption. - In January 1979, Shah Mohammad Reza Pahlavi fled Iran; in April, Ayatollah Khomeini’s Islamic Republic was proclaimed, plunging Iranian oil production into chaos and temporarily halting exports. - Between 1979 and 1980, global oil supply declined by only about 4%, yet market panic drove crude prices up 2.29-fold within a year—from $12 to $39.50 per barrel. - In September 1980, the Iran–Iraq War erupted, drastically reducing oil output from both nations and further tightening global supply, escalating the crisis.

Saudi Aramco CEO: Short-term resolution of the energy crisis is unlikely.

According to foreign media reports, Amin Nasser, CEO of Saudi Aramco—the world’s largest oil producer—spoke at the Schlumberger Digital Forum 2022 in Switzerland, stating that surging energy demand is colliding with shrinking energy supply, driving prices sharply higher amid an inability for energy companies and consumers alike to bear further cost increases. The CEO of this energy giant noted that, prior to the ongoing energy crisis, warning signs over the past decade had largely been ignored, and global plans to transition from traditional energy sources to renewables have failed to address critical issues. ‘This week, autumn has begun—and the global energy crisis portends a colder, harder winter, especially in Europe,’ the CEO remarked, adding that governments’ responses to the crisis left him feeling there was virtually no hope for a swift resolution. Nasser said: ‘When historians reflect on this crisis, they will find red warning signals flashing across global energy policy for nearly a decade. Indeed, from 2014 through last year, investment in oil and gas plummeted by more than 50%, falling from $700 billion to just over $30 billion. This year’s growth is too little, too late, and too short.’ The Saudi Aramco CEO emphasized that transitioning society away from traditional energy sources like oil and gas toward solar and wind power requires more than ideological conversion—it demands keeping current energy supplies fully operational until new infrastructure is in place, thereby bridging inevitable gaps in energy production. Since late February this year, soaring oil prices have boosted Saudi Aramco’s stock price by 25%. Moreover, Nasser argued that legislators and policymakers championing environmental causes are not helping by shaming oil and gas companies. ‘Because when you shame oil and gas investors, dismantle oil- and coal-fired power plants, fail to diversify energy supplies—especially natural gas—and oppose liquefied natural gas (LNG) import terminals or reject nuclear power, your transition plan had better be flawless.’

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