Will the Iran War change the world like the oil shocks of the 1970s did?

Jeff Sommer, The Oil Shocks of the ’70s Changed the World. Will the Iran War Do the Same? NYTimes, Mar. 28, 2026.

In January 1974, my dad lent me his old gas-guzzling Ford LTD to haul my clothing and books to college in Ithaca, N.Y. A couple of weeks later, when I tried to drive back home to Long Island, I realized that I couldn’t buy enough gas for the 250-mile trip.

The 1973-74 Arab oil embargo was well underway. The price of oil had nearly quadrupled; there were lines at gas stations, and drivers were allowed to queue up only on alternate days. I had picked the wrong day for my trip. No gas for me. So much for freedom of the road.

That was the first of the world’s big oil shocks. By the time of the second one in 1978-79, set off by the Iranian revolution, I was a reporter in New Jersey and it seemed I was constantly interviewing angry motorists stuck in interminable lines. Gas shortages and soaring inflation were just other aspects of life in the United States.

The gas lines ended as the crises ebbed, but it took two recessions, engineered by the formidable Federal Reserve chair Paul Volcker, to bring inflation under control.

What’s less well understood about that period is that the oil shocks reshaped the world’s financial markets. Money flowed around the globe in new ways — and cemented the status of the dollar as the world’s core currency.

We are experiencing what could end up as the third great oil shock.

Then we get more history and analysis, to end with this:

“Duration is the key question,” he told me. “If this goes on for a long time, it’s a big deal. If the war stopped right now, we might not need to talk about it next year.”

Not every conflict in the Middle East necessarily changes global finance in profound ways. The United States fought two Gulf wars — one that started in the early 1990s, the other a decade later. The first was short. The second one, the U.S.-led war with Iraq, stretched from 2003 to 2011, caused scores of thousands of deaths and cost hundreds of billions of dollars. The second war was a big one, but in retrospect, it preserved the status quo in energy markets more than it transformed them.

In every Gulf conflict since the Iranian revolution, U.S. strategists have worried that Iran might one day disrupt the global flow of energy by closing a geographical choke point, the Strait of Hormuz. For the first time, despite the pounding it has received from enormous U.S. and Israeli bombardments, Iran has demonstrated that it can close the strait. Roughly a fifth of the world’s oil and natural gas usually flows through it.

Whether this desperate achievement alters geopolitics substantially may not be known for years.