2014/01/01 by Nuno Luís Madureira, Madureira, Nuno Luis
Economics, Econometrics and Finance · Energy · #Global Energy Security and Policy #Global Energy and Sustainability Research #Natural Resources and Economic Development #Oil crisis #forecasting #information asymmetry #natural resources economics #oil price
paper · pdf · doi:10.12759/hsr.39.2014.4.70-93
openalex publication_date 2014/01/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
A global economic crisis is the most difficult kind of event to predict. This article asks a straightforward question: did anyone come close to anticipating the oil crisis of 1973/74, which represented a new type of historical sequence? Was the likelihood of an oil shock self-evident at the time? To answer this, I examine the degree of awareness in Europe and the United States of the three possible triggering factors: Egypt’s disposition to start a war and enlist the support of oil-producers; the Arab interest in oil conservation and long-term income maximization; and the imbalance in the oil market and the delayed adjustment of oil prices. For each of these topics, I set out both what was expected and what was actually in the offing; the information available to Western analysts and that unknown; the communication noises and the flagrant bias. The conclusion pays tribute to three men – James Akins, Pierre Wack, and Ted Newland – who had guessed what was coming ahead, and explains why their predictions almost succeeded, while others failed.