How Countries Responded to the Oil Crisis in the 1970s

The recent escalation of the Israel-Iran conflict has surpassed previous Middle Eastern geopolitical shifts since 1980 in terms of intensity and scope. In terms of the Strait of Hormuz blockade and its impact on global energy and shipping, it even exceeds the two oil crises of the 1970s. In the short term, the “shock reaction” of oil prices may not have fully subsided, but more importantly, the medium to long term, Middle Eastern energy security is under threat. It can be said that the market will need to pay a significant “new risk premium” for future energy prices for some time. Fortunately, compared to the 1970s, the global industrial structure has changed, and energy dependence has decreased. However, in the face of major investment demands driven by global geopolitical shifts and structural ruptures in industries, the decline in traditional energy security has made resource commodities even scarcer. This military conflict has only lasted 2-3 weeks so far, and many medium- to long-term effects have yet to emerge. This article reviews the policy responses of various countries after the 1970s oil crises and the long-term changes in economic structures, serving as a starting point for studying the long-term impacts of this current shock.

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