The infamous Yom Kippur War in 1973 between Egypt, Syria, and Israel led to a serious oil crisis that affected the world economy for years. Unfortunately, Luxembourg did not escape the repercussions of this crisis.
According to statements from the Energy Group, the horrific attacks by Hamas and Israel's response have not yet had a significant impact on oil prices. Roman Hoffman, the group's leader, does not anticipate an oil crisis akin to the 1970s, stating, "Today, global production is much more diversified. Back then, a large share of oil came from Arab countries, but now we have vastly different major producers, including Americans, Russians, and Africans; everything is much more diversified now."
However, the Minister of Energy sees a greater danger in the possibility that a Middle East war could lead to an increase in oil prices: "Why? Because behind the extremist group Hamas stands Iran. This means Russia needs high oil prices to fund its war, Saudi Arabia needs to pursue its policies, and Iran also desires high oil prices. In other words, we are facing a serious economic crisis."
Since the oil crisis of the 1970s, Western countries have established reserves to meet their emergency needs for up to 90 days, as stated by the Minister of Energy. If price hikes do occur, they will not have a substantial and lasting impact on the economy. The effects will quickly dissipate: "Because in Europe, we have no influence on oil prices. The only thing we can do, and what we have been striving for in recent years, is to break free from this heavy reliance on oil."
In conclusion, while the current conflict between Hamas and Israel has not yet led to a significant spike in oil prices, the underlying geopolitical factors suggest that the potential for an oil crisis looms. Luxembourg, like the rest of the world, must remain vigilant and proactive in diversifying its energy resources to mitigate potential economic shocks in the face of future geopolitical events.