Russia’s invasion of Ukraine and the resulting international backlash has plunged energy markets into chaos, threatening dire economic consequences that rival those of the 1970s oil shocks. Bloomberg’s gauge of raw materials was set for its biggest weekly gain since at least 1960 as sanctions on Russia scared off buyers. Coal racked up an unprecedented 80% rally, European natural gas broke price records and oil futures swung in the widest range in three decades.
International efforts to tame the market tumult have proved fruitless, even major actions such as the first coordinated deployment of emergency oil stockpiles by the members of the International Energy Agency in a decade. This creates a particularly perilous situation for US President Joe Biden, as he heads to midterm elections with slipping approval ratings. Temporary relief for consumers could come from an unlikely quarter: Iran.