Energy Shock
From 1973 to 2026, a tale of two crises
“We should not be at the mercy of events abroad,” writes UK Prime Minister Keir Starmer in yesterday’s Guardian. “The war in Iran must now become a line in the sand, because how we emerge from this crisis will define all of us for a generation”
Every so often, the world experiences an energy shock, often as a result of military conflict in the Middle East. How energy importing countries respond to these energy shocks varies, reflecting different political priorities.
Back in 1973, Arab countries who were members of OPEC (the Organisation of Petroleum Exporting Countries) imposed an embargo on oil exports to countries who had supported Israel in the Yom Kippur War. Global oil prices quadrupled. The UK Prime Minister at the time, Ted Heath, met with the heads of UK-based oil majors BP and Shell, asking that they patriotically prioritise supplying the UK. They refused, citing their obligation to fulfil international contracts. The UK government embarked instead on a campaign to reduce demand. Lower speed limits on roads were introduced, and drivers were encouraged to share their car or shift to public transport. Households were encouraged to take a shower instead of a bath, and to lower their home thermostat. Fuel ration cards were printed, though never used. The aim was to minimise the adverse consequences of supply shortages, and to limit their impact on already high levels of inflation.
The situation in 2026 is different. There’s no formal embargo, but the US/Israeli bombing of Iran, and Iran’s retaliation in the Gulf, have limited the passage of tankers through the Strait of Hormuz, with similar impacts on oil supplies and energy prices to those in 1973. Uniquely significant in this crisis are global supply chain issues with fertilisers (affecting future food production), helium (affecting the production of computer chips), LNG (Liquefied Natural Gas, an increasingly important supplement to domestic gas production), and jet fuel. An especially important difference is that we are more aware now than was the case half a century ago of how the burning of fossil fuels raises global temperatures and threatens climate stability.
Political responses in the UK to the current energy shock also differ from those in 1973. There’s now a refusal to impose, or even recommend, demand restraint, despite the fact that this would benefit the climate and nature as well as help limit rises in the cost of living. Instead, the main emphasis has shifted to encouraging the growth of energy production in the North Sea. The aim is to enhance long term energy security, although little account is taken of recent evidence that the cables and pipelines needed to bring the energy ashore are vulnerable to sabotage.
The right wing opposition parties, Conservative and Reform, both seek to boost energy security by drilling for more oil and gas in the North Sea. They ignore the physical reality that further extraction from a North Sea basin that is largely depleted will be both challenging and costly. They ignore, too, the commercial reality that any additional oil that is recovered would be sold on the global market, not necessarily to the UK (as Ted Heath discovered in 1973, oil majors are committed to selling where they can make the most profit). Most importantly, both these parties downplay how adding to fossil fuel extraction from the North Sea would further contribute to the climate crisis.
Labour and the Greens argue that the experience of the current energy shock proves the wisdom, on energy security as well as decarbonisation grounds, of pressing ahead with the transition away from fossil fuels towards renewable energy, and particularly towards offshore wind in the North Sea. There are some influential Labour politicians, though, who argue that energy security requires more drilling for oil and gas in the North Sea as well. These include Rachel Reeves (the Chancellor of the Exchequer), Anas Sarwar (the Labour leader in Scotland), and former Prime Minister Tony Blair. There are rumours, too, that Ed Miliband (the Energy Secretary, who is ultimately responsible for the decision), is resisting more oil extraction from the North Sea, but is considering allowing more drilling for gas, on the grounds that gas is still needed at this stage of the energy transition, and that North Sea gas involves less carbon emissions than those that occur from having to import LNG over long distances. How far Labour goes down the ‘drill, baby, drill’ route that has been pushed onto the UK by US President Trump will probably be settled more by narrow political calculations (will this win or lose votes in next month’s local elections, and what might be the consequences of upsetting Trump?) than by what would be best for energy security, the climate, or wild nature.
Supporters of additional drilling in the North Sea downplay how this would exacerbate the climate crisis, and exaggerate its potential for cutting energy bills. Supporters of more renewable energy generation in the North Sea downplay how harmful this can be for wildlife. All of them seem keen to avoid any restrictions on energy demand that would interfere with the economic growth that is the main enemy of both climate stability and wild nature. Growth is something that they are all determined not to question.
UK political unwillingness to respond to the current energy shock by restraining energy demand contrasts both with how the Heath government responded to the 1973 energy shock, and with the demand restraint policies currently being adopted by many other countries, particularly in Asia. It reveals not only a shared reluctance, across the UK political spectrum, to interfere with the market forces that ration scarce resources by pushing up prices, but also a shared commitment to a growth agenda that is relentlessly destroying our planetary home.