“We’re now facing what looks like the biggest energy crisis since the oil embargo in the 1970s.” – Helima Croft – RBC Capital Markets
The comparison to the 1970s oil embargo carries profound weight in energy markets, and understanding why requires examining both historical precedent and the distinctive characteristics of the current crisis.
The 1973 Oil Embargo: Historical Context
The 1973 Arab oil embargo, triggered by the Yom Kippur War, fundamentally reshaped global energy markets and geopolitics. The Organisation of Arab Petroleum Exporting Countries (OAPEC) imposed an embargo on oil shipments to nations supporting Israel, reducing global oil supplies by approximately 7% and causing crude prices to quadruple from $3 to $12 per barrel within months. The embargo lasted five months but exposed the vulnerability of Western economies to supply disruptions orchestrated through deliberate political action. Beyond the immediate price shock, the embargo triggered stagflation, fuel rationing, long queues at petrol stations, and a fundamental reassessment of energy security across industrialised nations. It demonstrated that energy markets were not merely economic systems but critical infrastructure vulnerable to geopolitical weaponisation.
The Current Crisis: Physical Disruption and Strategic Vulnerability
What distinguishes the current situation is that rather than a deliberate embargo imposed by suppliers, the disruption stems from active military conflict directly targeting energy infrastructure and choking critical shipping routes. The Strait of Hormuz, through which approximately 21% of global petroleum and 25% of liquefied natural gas (LNG) passes, has become what one analyst described as an “effective parking lot with very few tankers going through.” This represents not a policy decision but a physical blockade created by military operations and the resulting insurance and security risks that make transit prohibitively dangerous or expensive.
The targeting of energy facilities compounds the supply shock. Qatar’s LNG operations-critical to global gas supplies, particularly for Europe and Asia-have been directly targeted. The United Kingdom, which has weaned itself from Russian gas supplies, is heavily dependent on Qatari LNG imports, creating a two-fold vulnerability: the loss of Russian supplies combined with disruption to alternative sources. Europe faces what analysts describe as a “significant energy shock” precisely because it has systematically eliminated Russian energy dependence without securing alternative, stable sources.
Why This May Exceed the 1970s Crisis
Several factors suggest the current disruption could prove more severe than the 1973 embargo. First, the 1970s embargo was time-limited and politically negotiable; the current conflict has no clear endpoint and depends on military outcomes rather than diplomatic resolution. Second, the 1970s crisis affected primarily crude oil; the current crisis simultaneously disrupts both oil and natural gas markets, with LNG prices reflecting substantially higher risk premiums than crude oil. Third, alternative export routes are extremely limited. Whilst the 1973 embargo could theoretically be lifted through negotiation, producers such as Kuwait and southern Iraq lack viable alternative export routes if the Strait remains closed. These become, in the terminology of contemporary analysis, “stranded assets”-resources that cannot reach markets regardless of price.
The duration question remains critical. The 1973 embargo lasted five months; current assessments suggest this disruption could persist far longer, depending on military developments and the timeline that policymakers in Washington define as “success.” Extended disruption would create cascading effects: shipping companies and insurers withdrawing from the region, alternative routes becoming congested, and prices remaining elevated not because of scarcity alone but because of the structural inability to move supplies through traditional channels.
Helima Croft and the Analysis of Energy Geopolitics
Helima Croft, Managing Director and Head of Global Commodity Strategy and Middle East and North Africa (MENA) Research at RBC Capital Markets, occupies a distinctive position in contemporary energy analysis. Her role encompasses not merely market forecasting but strategic assessment of how geopolitical events translate into energy market outcomes. As a member of the National Petroleum Council-a select advisory body that informs the U.S. Secretary of Energy on matters relating to oil and natural gas-Croft operates at the intersection of market analysis, policy influence, and strategic intelligence.
Her assessment that current conditions mirror the 1970s crisis reflects her expertise in recognising structural similarities across different historical periods. However, her analysis also emphasises what distinguishes the current moment: the role of drone and missile capabilities, the vulnerability of alternative export routes, and the question of whether security escorts through the Strait or political risk insurance will prove sufficient to incentivise shipping companies to resume normal operations. These are not merely economic questions but strategic ones about the credibility of security guarantees and the risk tolerance of commercial actors operating in conflict zones.
The Theoretical Framework: Energy Security and Geopolitical Risk
The analysis of energy disruption as a geopolitical weapon draws on several theoretical traditions. The concept of “energy security” emerged as a distinct field of study following the 1973 embargo, with scholars examining how nations could reduce vulnerability to supply shocks. Theorists such as Daniel Yergin, whose work on energy history and geopolitics has shaped policy thinking for decades, emphasised that energy markets are inherently political-that supply, pricing, and access reflect power relationships rather than purely economic forces.
More recent scholarship on “critical infrastructure” and “systemic risk” provides additional analytical frameworks. The Strait of Hormuz represents what security theorists call a “chokepoint”-a geographic location whose disruption creates disproportionate systemic effects. The concentration of global energy flows through a narrow maritime passage creates what economists term “tail risk”: low-probability but catastrophic outcomes. The current situation represents the actualisation of this theoretical risk.
Contemporary analysis also draws on game theory and strategic studies, examining how military actors calculate the costs and benefits of targeting energy infrastructure. The targeting of Qatar’s LNG facilities suggests a deliberate strategy to maximise economic disruption beyond immediate military objectives. This reflects what strategists call “economic coercion through infrastructure targeting”-using energy disruption as a tool of strategic pressure.
Market Implications and the Question of Price Responsiveness
Notably, Croft has observed that despite physical supply disruptions, the price reaction has been “pretty muted” relative to the risk involved. This apparent paradox reflects several dynamics. First, markets may be pricing in expectations of policy intervention-announcements of strategic petroleum reserve releases or diplomatic efforts to secure alternative routes. Second, the market may be discounting the probability of extended disruption, assuming that either military resolution or negotiated settlement will restore flows within a defined timeframe. Third, different commodities show different risk premiums: European natural gas prices, which reflect the region’s acute vulnerability, have risen 4-6%, a more accurate reflection of systemic risk than crude oil prices alone.
The question of whether security escorts or political risk insurance will prove sufficient to restore shipping through the Strait remains unresolved. This is not merely a technical question but a strategic one: will commercial actors trust security guarantees in an active conflict zone? The answer will determine whether the current disruption proves temporary or structural.
Conclusion: Historical Echoes and Contemporary Distinctiveness
The comparison to the 1970s oil embargo serves as a useful historical reference point, but the current crisis possesses distinctive characteristics that may render it more severe and more difficult to resolve. The 1973 embargo was a deliberate policy instrument that could be negotiated; the current disruption stems from active military conflict with no clear resolution mechanism. The 1970s crisis affected primarily crude oil; the current crisis simultaneously disrupts oil and natural gas markets. And whilst the 1973 embargo lasted five months, current assessments suggest this disruption could persist far longer, creating structural changes in energy markets, shipping patterns, and geopolitical alignments that will persist long after military operations cease.
References
1. https://www.youtube.com/watch?v=Q9_bP9XNRHc
2. https://www.youtube.com/watch?v=ZJyS2qaNx5Q
3. https://www.trilateral.org/people/helima-croft/
4. https://smartermarkets.media/special-episode-iranian-conflict-helima-croft/
5. https://www.rbccm.com/en/insights/2026/03/middle-east-energy-crisis-stranded-assets
6. https://www.rbccm.com/en/insights/2026/02/intelligence-insights-energy-in-a-changing-world
7. https://www.rbccm.com/en/insights/real-time-geopolitics
