For Oil, It’s Not 1973 Again – But It Could Still Turn Ugly
Crude prices are likely to rise after the surprise Hamas attack on Israel, but there’s still plenty of capacity to tap.
Youths attend a short documentary feature in Cairo last week with archival clips from the 1973 Arab-Israeli war
Photographer: KHALED DESOUKI/AFP History doesn’t repeat itself, but it often rhymes. On the eve of the 50th anniversary of the world’s first oil crisis, the parallels between October 2023 and October 1973 are easy to draw: A surprise attack on Israel and oil prices rising. But the resemblance ends there.
The global economy isn’t about to suffer another Arab oil embargo that would triple the price of a barrel of crude. Yet, it would be a mistake to downplay the chances that the world faces higher-for-longer oil prices.
The situation is fluid, and for the oil market, everything depends about how Israel responds to Hamas, which launched the attack, and Iran, which typically pulls the strings of the Palestinian group. Still, we can draw a few tentative conclusions:
1) The crisis isn’t a repeat of October 1973. Arab countries aren't attacking Israel in unison. Egypt, Jordan, Syria, Saudi Arabia and the rest of the Arab world are watching the events from the sidelines, not shaping them.