The world is heading for a 1973-type energy shock: France

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PARIS: The soaring energy prices caused by the Russian war in Ukraine will produce effects comparable to the oil shock of 1973, French Economy Minister Bruno Le Maire warned on Wednesday. The current energy crisis was “comparable in intensity, in brutality, to the oil shock of 1973”, Le Maire told a conference in Paris.

“In 1973, as you know, the response caused an inflationary shock, leading central banks to massively raise rates, which killed growth,” Le Maire added.

“It has a name: stagflation, and that is precisely what we want to avoid in 2022.”

The first oil shock in the early 1970s was caused by the Yom Kippur War when Egyptian and Syrian forces launched an offensive against Israel.

Six Arab members of the OPEC oil cartel have declared an embargo on exports to countries supporting Israel, including the United States.

They quadrupled the price of oil to $11.65 a barrel, causing recessions in Western countries and high inflation.

French Minister of Finance: still room for new sanctions against Russia

Wholesale gas and crude oil prices in Europe hit record or near-record prices this week on supply fears related to Russia’s February 24 invasion of Ukraine.

The United States and Britain announced on Tuesday that they were cutting Russian energy imports in response to the war, triggering another price spike.

The price of Brent, the international benchmark, was up near $130 a barrel on Wednesday.

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