economy
March 13, 2026
Iran War Oil Shock Stokes Fears of 1970s-Style Stagflation
Some investors are drawing comparisons with the 1970s to interpret where markets are headed in 2026, but there are several key differences to note this time around.
TL;DR
- Fears of 1970s-style stagflation are increasing due to rising oil prices linked to geopolitical conflicts.
- The 1970s experienced a major market crash and a lost decade for equities due to stagflation and an oil crisis.
- Current economic conditions differ from the 1970s, with the U.S. being a larger oil producer and thus less vulnerable to supply shocks.
- Gold has not performed as expected during the recent oil price spike, unlike in 1973, partly due to a stronger dollar.
- The performance of small-cap stocks in the 1970s occurred after a severe market crash, a recovery phase not yet seen in the current market.
- Some analysts suggest a potential regime shift from paper assets to hard assets like energy and metals.
- Current oil prices are below the peaks seen after Russia's invasion of Ukraine and the 1970s OPEC crisis.
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