France, Europe and the world are about to go through a serious energy crisis due to the war in Ukraine. European leaders are meeting on Thursday March 10 and Friday March 11 in Versailles to discuss their dependence on Russian gas and oil. The rise in the price of hydrocarbons has accelerated further since the start of the Russian invasion. The barrel of Brent has taken 66% since the start of 2022, at 130 dollars currently. The contemporary crisis is compared to the oil crisis of 1973, in particular by Bruno Le Maire.
What impact on the economy?
In 1973, the Yom Kippur War, between Israel and several Arab countries, caused the oil crisis. To respond to the support of Western countries for Israel, the Organization of the Petroleum Exporting Countries (OPEC) took two measures: an initial increase of 70% in the price of a barrel, as well as a sharp reduction in their production. and their exports to Europe, the United States and Japan. The barrel cost only 2 dollars before the war.
As a result of these decisions, the price of a barrel quadrupled in the space of six months, precisely between October 1973 and April 1974. Faced with the shortage of oil, motorists lined up at service stations in Europe and in the United States, where we had never seen that. Prices at the pump rose by 30% in France between October 1973 and January 1974 to reach 1.62 francs. Today, prices at the pump have also been climbing since Christmas. Unleaded 95 increased by 17%. Diesel recently took 14 cents in a single week. Some now fear that prices will soar beyond 2.50 euros per liter, whether for gasoline or diesel.
What measures have been taken?
Drastic measures were taken to save oil in 1973. Traffic was banned on Sundays in the Netherlands, Belgium, Germany, Denmark and Switzerland. In France, motor racing has been banned. The maximum speed on the road has also increased to 90 km/h and to 120 kph on the highway. Given the huge dependence of economies on oil at the time for electricity generation, the illumination of shops and offices was banned in France between 10 p.m. and 7 a.m. The TV programs stopped at 11 p.m. In Britain, people have been asked to heat only one room per apartment.
Nowadays countries are less dependent on oil for the production of electricity. This is particularly true in France, with nuclear. Under the effect of the rise in the price of a barrel, inflation took off to reach 9% in 1973, almost 14% in 1974, around 12% in 1976. Today, inflation is making a comeback in the euro zone . It flirts with 6% on an annual basis. We hadn’t seen that since the mid-1980s.”After 1973, we continued to consume more and more fossil fuels” Explain François Gemenne, teacher at Sciences Po and the Sorbonne. He is also a supporter of Yannick Jadot, environmental candidate for the 2022 presidential election.
A missed opportunity in 1973?
“One of the effects of the oil shock of 73, it is perhaps that we became aware of the planetary limits, the limits of the natural resources“explains the one who is also director of the Hugo Observatory at the University of Liège. “We must remember that this oil shock comes a year after the publication of the WITHOUT report on the limits of growth. For François Gemenne, the oil shock of 1973 “sounds a bit like the end of the recreation of the decade of the ‘Golden sixties'” who have been “marked by a logic of infinite growth“.
“Somehow, this war reminds us how much we remain prisoners of fossil fuels.”
François Gemenne, professor at Science Po
at franceinfo
The Sciences Po teacher also argues that the war in Ukraine could, paradoxically enough, lead to the acceleration of the energy transition..”IWhen we refuel or when we heat our apartments, we are financing Putin’s war in spite of ourselveshe explains. This makes additional reasons to reduce our consumption. “If we had started the energy transition 20 or 30 years ago, from the first alerts from the IPCC, it is likely that we would not be in this dependency and therefore vulnerability to Russia”, concludes Francois Gemenne.