2026 oil shock less severe than 1970s and 2022 crises, says French institute

The French national statistics institute, Insee, has calculated that the 2026 energy crisis's impact on purchasing power for petroleum products was similar to previous shocks. This finding contrasts with a recent assessment by the International Energy Agency director, Fatih Birol, who described the current energy shock, triggered by Middle East conflict, as more severe than those of 1973, 1979, and 2022 combined.

Insee's study, however, suggests the current crisis is less significant than the oil crises of the 1970s and the 2022 shock following Russia's invasion of Ukraine. The institute supports this view with several indicators, including the price of a barrel of crude oil. While it surpassed $100 in March after the conflict between Israel and Iran began, Insee notes this level is historically high but slightly lower than peaks in 2022 and 2008. Prices have since eased following a recent agreement between Tehran and Washington.

Furthermore, Insee points out that exchange rates are more favorable for Europe now than in 2022, mitigating the rise in Brent crude prices in euros. Unlike the 2022 crisis, which saw gas and electricity prices soar due to fears of supply disruptions from Russia and the unavailability of French nuclear power, the current situation has seen more stable energy prices. Gas prices rose by over 60% due to the blockade of the Strait of Hormuz, but the current level is significantly lower than the 2022 peak.

In essence, Insee concludes that the 2022 energy shock was more severe than the current episode, which is primarily characterized as a petroleum shock. While the impact on purchasing power for petroleum products is comparable to past crises, the overall energy crisis appears less grave than its predecessors.