Analysts Debate Economic Fallout Odds From Russia’s Invasion, Historian Says World May Face Worst Energy Crisis Since the 1970s – Economics Bitcoin News

While Russia’s Ukraine invasion has been at the forefront of people’s minds, a global recession and the possibility of an energy crisis have been thrown into the conversation. According to reports, the risks of an American economic recession are increasing. Daniel Yergin, an energy market analyst thinks that the conflict in Ukraine may lead to major energy problems similar the oil crisis of the 1970s.

Top Economists Say Odds of Recession Are Rising, While Some Are Inclined to Believe Economic Fallout Will Be ‘Modest,’ Energy Disruptions Will Be ‘Limited and Temporary’

On Friday, USA Today author Paul Davidson explained in a report that the odds of a recession in 2022 “are rising amid soaring inflation.” Davidson detailed that “some top economists are raising the odds of a slump within the next year or so.”

This increased risk despite the robust U.S. job market. USA Today’s author wrote that the energy prices have soared and the inflation rate has reached historical levels. On the other hand, Moody’s Analytics chief economist Mark Zandi explained on February 28, that in terms of the U.S. economy, the fallout from Russia’s invasion of Ukraine will likely be “modest.”

Zandi said the energy market disruptions will be “limited and temporary” and the economist further stressed, “it will be a different story for the Russian economy, which is set to take a massive hit.”

The Moody’s economist added, however, that if crude oil remains at $100 per barrel for a sustained amount of time, U.S. consumers will pay $80 billion more for gas. Lindsey Bell, Ally’s chief markets and money strategist, agrees with Zandi’s forecast and explained the “impact on the U.S. economy isn’t likely to be significant.”

Vice Chairman of IHS Markit: The Energy Crisis ‘Could Well Be on the Scale of the 1970s’

Some people are not optimistic about the future of the economy. Others believe that the effects on the global economy will be much more severe than the current situation. A recent report from CNBC’s Patti Domm highlights that Daniel Yergin, the vice chairman of IHS Markit, believes the world could be headed toward an energy crisis similar to the energy crisis that took place in the 1970s.

The 1970s’ energy scarcity was blamed on the Yom Kippur War in 1973 and 1979 and the Iranian Revolution in 1979. Yergin (an energy market historian) told Domm that Russia exported 7.5 million barrels per day of crude oil and various types of refined petroleum products.

“This is going to be a really big disruption in terms of logistics, and people are going to be scrambling for barrels,” Yergin said. “This is a supply crisis. It’s a logistics crisis. It’s a payment crisis, and this could well be on the scale of the 1970s.” The energy market historian and IHS Markit executive added:

This crisis could prove to be worse than the Arab oil embargo or the Iranian revolution of the 1970s.

Meanwhile, the head of petroleum analysis at Gasbuddy, Patrick De Haan, said on February 28 that gas prices in major U.S. cities will be $5 per gallon “in the next couple of weeks.” On Thursday, De Haan told his Twitter followers that the city of San Francisco tapped the $5 per gallon region.

“It’s been quite ugly as gas prices rise nationally, but nowhere has the pain been more significant than California, where prices have breached the $5-gallon mark,” De Haan told Fox Business reporters. Moreover, Gasbuddy’s petroleum analyst remarked to Fox that gas prices “will continue to head north,” and prices could hit $5.35 per gallon by the end of the month. Yergin, an IHS Markit executive and historian of the energy market, highlighted how these events have been unprecedented.

“What we haven’t seen before is the big reputational issue as well, companies not wanting to do business with Russia,” Yergin concluded in his interview published on Thursday. “Vladimir Putin in a week has destroyed what he spent 22 years building, an economy that was basically integrated with the global economy. Now what’s happened is Russia is unplugged from the global economy,” Yergin added.

Are you concerned about the increasing risk of economic decline as a consequence of war in Europe’s conflict? Are you concerned that we could face an international energy crisis like the one in the 1970s. Comment below to let us know your thoughts on this topic.

Jamie Redman

Jamie Redman is the News Lead for Bitcoin.com News. He also lives in Florida and works as a journalist covering financial technology. Redman joined the cryptocurrency community in 2011 and has been actively involved since then. Redman is passionate about Bitcoin and open-source codes. Redman is a prolific writer for Bitcoin.com News, with over 5,000 articles on disruptive protocols.