[skybrian]

Before calling it "the worst", I'd like more detail on how to do the comparison with the oil crises of the 1970's. My guess is that modern economies might be somewhat less oil-dependent than they were then, because the alternatives are more developed.

[UncleOxidant]

They are more developed, sure, and the US (from a US centric view) is producing a lot of oil now. However, consider that pretty much all of the goods you see in the supermarket got there via diesel (trains, semi-trucks). The percentage of semi-trucks operating on electricity is still miniscule at this point. Air transport? All petroleum. Consider also other things like fertilizers - we're heavily dependent on nitrogen fertilizers derived from petroleum and planting season in the northern hemisphere is starting right about now. Yes we're producing a lot more electricity with renewables, but demand is also up.

[IsTom]

Oil going through Hormuz is 20%, not 80% of global supply. It's true that demand is pretty inelastic, but it's not like it can't be cut at all.

[UncleOxidant]

Who mentioned 80%?

During the 1973–74 Arab oil embargo, the disruption removed approximately 4.5 million barrels per day (mb/d) from the market, which constituted about 7% of the global oil supply at the time. This disruption significantly impacted global supplies.

20% is a lot more than 7%. This could be worse than 1973-74. As a 10year-old in 1973 I remember spending a lot of time in the backseat of the station wagon as we were waiting line line for gas.

For context, during the first COVID spring (March-June 2020) oil demand fell by 20%. Because nobody was driving or flying anywhere. That's what it took to cut 20%.

[kvuj]

And yet we are a lot more globalized than in the 1970s. Ressources can be diverted at a much quicker rate with a lot more agility.

[thelastgallon]

Yes, couldn't make either face masks or toilet paper during covid. Most people will find out how fragile everything is with idiot MBAs optimizing just-in-time for better quarterly reports!

[c1sc0]

Good! Then a much-needed correction in behavior will follow.

[pseudohadamard]

To look at it another way, we're a lot more globalised than in the 1970s. Resources halfway across the planet that you never even knew you depended on can shut you down when they suddenly go away.

[bsder]

> Ressources can be diverted at a much quicker rate with a lot more agility.

That's completely incorrect.

Covid demonstrated that. We have optimized so strongly for profit (outsource everything, just in time inventory, etc.) that we have no robustness in the face of disruption. There are now single chokepoints everywhere.

Yes, we could retool. But nobody will retool without a check from somebody. Everybody will simply hold their breath waiting for the crisis to pass. Everybody held their breath for Covid; they will absolutely do so with the knowledge that the orange clown will disappear in two years.

[UncleOxidant]

We're going to find out how much agility exists in the system (under perturbation). In the meantime countries in Asia are scrambling for supply.

[SuperNinKenDo]

Globalization can run both ways. It can also create much more sensitivity to disruption as bets are placed in a system with a lot more moving parts.

[1718627440]

Somebody probably has another virus in stock. /s

[reaperducer]

Before calling it "the worst", I'd like more detail on how to do the comparison with the oil crises of the 1970's.

There's a graph in today's (March 28/29) Wall Street Journal that does exactly that, and shows that what's happening now is both currently slightly worse than the 1970's, and the worst oil shock in history.

And remember that this isn't over yet.