What happened 50 Years ago could repeat itself
Posted: Mon Oct 09, 2023 9:54 am
From Raymond James Energy Sector Team
Energy Stat, History Edition: 50 Years Since the 1973 Oil Crisis — What Are the Lessons from the Past Half Century?
Fifty years ago this week marked the beginning of an era-defining episode in history: the oil crisis of 1973-1974. We cannot let this anniversary pass without offering our commentary on lessons learned over the past half century, specifically as it relates to energy security.
Could a hostile state actor cause disruption in the global oil market?
Yes. But is the world much better protected from the risk of systematic oil shortages? Yes to that too. The much-improved level of risk is a direct legacy of the events of 1973-1974, which led to the creation of the International Energy Agency (IEA) and a legally binding framework for maintaining and sharing emergency oil stockpiles. At the same time, politicians have a decidedly mixed track record of (ab)using these assets for questionable reasons. Perhaps the most glaring omission since then is the absence of an analogous policy for natural gas, an issue that became keenly felt amid Russia’s war in Ukraine, the gravest threat to energy security in the past half century.
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MY TAKE: Maybe we should ban draining our Strategic Petroleum Reserves (SPR) for political reasons!
Energy Stat, History Edition: 50 Years Since the 1973 Oil Crisis — What Are the Lessons from the Past Half Century?
Fifty years ago this week marked the beginning of an era-defining episode in history: the oil crisis of 1973-1974. We cannot let this anniversary pass without offering our commentary on lessons learned over the past half century, specifically as it relates to energy security.
Could a hostile state actor cause disruption in the global oil market?
Yes. But is the world much better protected from the risk of systematic oil shortages? Yes to that too. The much-improved level of risk is a direct legacy of the events of 1973-1974, which led to the creation of the International Energy Agency (IEA) and a legally binding framework for maintaining and sharing emergency oil stockpiles. At the same time, politicians have a decidedly mixed track record of (ab)using these assets for questionable reasons. Perhaps the most glaring omission since then is the absence of an analogous policy for natural gas, an issue that became keenly felt amid Russia’s war in Ukraine, the gravest threat to energy security in the past half century.
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MY TAKE: Maybe we should ban draining our Strategic Petroleum Reserves (SPR) for political reasons!