How oil shocks caused a lost decade in SFR Yugoslavia and are we at the beginning of a third oil shock?

March 12, 2026

TL;DR

Oil prices briefly reached nearly $120 a barrel on March 9th, prompting fears of a third oil shock.
Despite a subsequent drop to around $90, the International Energy Agency called for the release of 400 million barrels from strategic reserves to stabilize prices.
Current oil prices are about 25% higher than before the Ukraine conflict but are not as impactful as the 1973 or 1979 shocks when adjusted for inflation.
The 1973 oil shock was caused by an OPEC embargo following the Yom Kippur War, leading to fuel shortages and high inflation.
The 1979 oil shock resulted from the Iranian Revolution and the Iran-Iraq war, contributing to stagflation (high inflation and low economic growth).
Both shocks significantly impacted SFR Yugoslavia's economy, contributing to a 'lost decade' of slow growth and high inflation, leading to IMF intervention and austerity measures.
The world has learned from past shocks, increasing energy efficiency, developing new oil sources, and improving engine technology.
Despite current price volatility, experts believe a catastrophic collapse is unlikely, with geopolitical relations being a greater concern than energy prices alone.

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