By Daniel Béland

March 10, 2026

Both oil crises of the 1970s originated from conflict in Middle East.

In 1973, U.S. support for Israel during the Yom Kippur War angered people in the Arab world and led oil-producing countries in the Middle East, including members of the Organization of Petroleum Exporting Countries (OPEC), to put a halt to oil exports to the United States and other countries that had backed Israel, including Canada.

This oil embargo led to a sudden, massive increase in oil prices across North America and the formation of long lines in front of gas stations.

Even if the embargo ended in 1974, the 1973 oil crisis had long-term negative economic and fiscal consequences in North America, contributing directly to the rise of stagflation, an unfortunate mix of slow growth, high unemployment, and high inflation.

In 1978-1979, the Iranian Revolution brought about the second oil crisis, as the uprising led to a decline in about 7% of the world’s oil production at the time. This abrupt loss in production, combined with panic among crude-oil buyers, led to a major increase in oil prices, which rose by more than 150% over a period of 12 months.

The combined negative consequences of the 1973 and 1979 oil crises had dramatic economic but also political consequences in Canada, where the Pierre Trudeau government justified the advent of the controversial 1980 National Energy Program through direct references to these developments originating in the Middle East.

Economic fears related to oil prices stemming from this war might create strong incentives for the president to pull the plug on U.S. military operations.

While the two oil crises triggered respectively by the Yom Kippur War and the Iranian Revolution had an enduring impact on oil prices, the same is not true of the 1991 and 2003 U.S.-led Iraq wars.

On the one hand, while the 1990 Iraqi invasion of Kuwait led to a spike in oil prices, these actually fell as soon as allied bombings began in early 1991. On the other hand, in 2003, oil prices increased in the months preceding the U.S. invasion but they dropped right after it took place. In other words, swift military success makes a difference here.

In the Gulf War launched by the United States and Israel on February 28th, President Donald Trump told the world on Monday in response to a spike in oil prices to nearly $120 a barrel that the war will end soon, which contributed to the rollercoaster effect of the administration’s regularly shifting and often contradictory statements, sometimes uttered the same day.

In this case, the statement brought oil prices back down to $90 a barrel.

One thing is clear; that the president is extremely sensitive to changing stock and oil prices. In this context, the administration might be reconsidering its plans with regard to Iran over concerns about fluctuating oil prices and, more generally, the negative domestic economic and political impact of the war, which could cause additional headaches for Republicans ahead of the November 3rd midterms.

In other words, economic fears related to oil prices stemming from this war might create strong incentives for the president to pull the plug on U.S. military operations.

This hasty end of the U.S. involvement would be easier to justify because the Trump administration never clearly defined the end game of the war in the first place. If the actual goals and motivations of the war are unclear, it could be potentially easier for this administration to frame its outcome as a victory.

There are a lot of moving parts here, many of them obscured by the usual fog of war, but sudden fluctuations in oil prices as they relate to the domestic political calculus of Trump and the Republicans ahead of the midterms could be a significant factor in ending this war.

Daniel Béland is professor of political science and director of the McGill Institute for the Study of Canada at McGill University.