Stock Market 1973: The Crash that Started after the Embargo was lifted
Instead of Reading you can simply listen to this report: https://youtube.com/watch?v=Z7qKukbdRDw…
Do you know that the biggest Stock Market crash since the great depression happened after the Oil Embargo was lifted, and not during the Oil Embargo ? The lesson from 1973–1974 is much darker. The biggest crash did not happen during the oil embargo. The biggest crash started after the embargo was lifted, exactly when everyone thought the crisis was over.
1. THE EMBARGO WAS ONLY THE FIRST SHOCKA: An oil embargo simply means oil supply is restricted or blocked from reaching the market. In 1973 when the Oil Embargo was announced, The S&P 500 dropped roughly 20% after the embargo started. Most people think that was the real damage. Wrong. That was only the first shockwave
2. THE REAL DAMAGE CAME AFTER “THE WORST IS OVER”: The oil embargo officially ended in March 1974. This should have been bullish. The crisis was supposedly over, oil flows were expected to normalize. Instead, the opposite happened. From the moment the embargo was lifted, the S&P 500 entered the real collapse and crashed 40% in the following weeks. This is the part almost nobody understands: the crash did not happen because the embargo was still active. The crash happened because the damage had already infected the economy.
3. THE MARKET PRICED THE DAMAGE: The embargo ending did not magically erase the damage that was created during those months. That is why the market crashed after the “good news.” The headline was bullish, but the economy underneath was already broken. Even more shocking: oil did not collapse after the embargo ended. Over the following years, oil continued to rally massively, more than 300%, not because of a classic modern short squeeze, but because of a brutal supply squeeze, inflation, and a full repricing of energy.
4. IS HISTORY REPEATING?: In 1973, only around 5–7% of global oil demand was affected for roughly 5 months, and the result was one of the worst stock market crashes since the Great Depression. Today, a much larger share of global oil flows has been under pressure for months, while the S&P 500 is making new highs and investors are once again pricing in a soft landing, same as in 1974! And yet, the real crash can begin after everyone thinks the worst is behind us.
THIS IS NO FINANCIAL ADVICE AND EDUCATIONAL CONTENT ONLY
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