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IPFS News Link • WAR: About that War

Middle East Wars and Oil Shocks

•, by Nick Giambruno

It was the most significant attack against Israel since the 1973 Yom Kippur War, which started almost 50 years ago to the day.

Now, Israel has formally declared war for the first time since 1973.

The Middle East is on the precipice of a regional war that could eclipse the 1973 Yom Kippur War.

Many people don't appreciate how close we are to a catastrophe of historic proportions that will touch everyone.

Remember, American support for Israel during the 1973 Yom Kippur War was the catalyst for the OPEC embargo, which caused the first oil shock. The oil price roughly quadrupled, from around $3 per barrel to about $12 in a matter of days.

It immediately triggered an energy crisis. There were gas shortages and panic in the US as drivers sat in lines stretching for blocks, waiting to fill their gas tanks.

The second oil shock followed in 1979 as crude prices nearly tripled. A large conflict in the Middle East was again the cause—the Iranian Revolution and the subsequent Iran-Iraq War.

A third oil shock occurred in 1990 as Iraq invaded Kuwait, causing oil prices to more than double.