Insights

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REview

15. March 2022

Will Russia become the next Iran?

Oil embargo. Younger generations have been lucky enough to live through times when they didn’t have to grapple with the impact of this condition. In the decades that came after the huge oil embargos in the 1970s and early 80s, governments around the world produced energy policies to attempt to deal with them, including setting aside hundreds of millions of barrels of petroleum in strategic reserves, investing in alternative sources of energy, and incentivizing the pursuit of energy efficiency, as policymakers around the globe promised “Never again”. Yet, a 21st century world that until a few weeks ago was abuzz with energy transition plans and pledges, with the primary aim to contain emissions and turn decisively towards a renewables future, is now scrambling to understand the impact of a large disruption in oil and gas trade flows – a market upheaval that may result in a significant oil shortage right at a time when many economies are already facing high and rising inflation. Suddenly, the world’s second-largest oil producer is shut out of the biggest oil consuming market, with prospects of other major economies, particularly in the West, increasingly prone to follow suit – this is the topic of this month’s REview note.