Angela Wilkinson of the World Energy Council said Thursday that the current oil crisis is different from previous oil crises and that consumers will have to bear the impact as inflation rises.
“I think this is a first global energy shock, this isn’t the same as the 1970s crisis, oil shock crisis. This is a consumer driven crisis and the consumer-driven adjustments that are going to come out of this are going to be very significant.”
The rise in oil prices came after Russia, a major oil producer, invaded Ukraine in late February. This caused significant disruption to the global energy supply chain. Western countries joined forces to impose severe economic sanctions on Russia for its invasion of Ukraine.
In addition, the European Union (EU) has proposed a gradual ban on oil imports from Russia, further increasing pressure on energy prices.
On Friday (May 20), Brent crude oil prices on the Asian market have increased by more than 42% since the beginning of the year. The latest increase has led to a price of $ 111 per barrel. This is significantly higher than the level of under $ 80 per barrel at the beginning of this year.
In 1973, Middle Eastern oil producers suspended oil sales to the United States and other Western countries after they supported Israel in the Arab-Israeli War of that year. The Iranian Revolution of 1978-1979, which led to the overthrow of the Shah of Iran, created an energy panic.
Ms. Wilkinson warned that given the prices of refined petroleum products in many parts of the world, it was apparent that many people in the lower half of society could no longer afford the high prices, “We’re going to have to see some form of massive reallocation of money coming out of this crisis. Consumers are really, really hurting.”