Strategic Assets – April 2026

Before October 17, 1973, Americans barely gave a second thought to where their gasoline came from. A gallon cost less than 40 cents — cheaper than milk. Stations competed for business with free road maps and windshield washes.

But on the morning of October 17th, Americans couldn’t think about anything else.

The day before, in retaliation for American military support of Israel during the Yom Kippur War, the Organization of Arab Petroleum Exporting Countries (OPEC) had announced an oil embargo against the United States.

Within weeks, the price of crude had quadrupled. Gas stations ran dry across the country and those that still had fuel saw lines stretching around the block. Americans waited hours for their turn, with odd-even rationing by license plate number and, in more than a few cases, fights broke out between neighbors over a few gallons of fuel.

It wasn’t that the oil had physically disappeared. The wells were still pumping. The tankers were still afloat. But a political decision made 7,000 miles away had severed the supply chain, and suddenly the most powerful economy on earth couldn’t fill its cars.

What shocked Americans most wasn’t the price though. It was the revelation that the entire postwar way of life — the suburbs, the commutes, the interstate highways, the cheap abundance of just about everything — had been built on an assumption so fundamental that nobody had ever bothered to question it: the stuff we need will always be there when we need it.

It was a dangerous assumption in 1973. And it was wrong.

The postwar order that the United States constructed after World War II was designed, above all else, to make sure that critical resources flowed freely. American naval power secured shipping lanes. The Bretton Woods system anchored global trade. NATO, the Marshall Plan, and eventually the World Trade Organization created an architecture built on the belief that nations bound together by trade would have no reason to go to war.

And it worked — spectacularly. Supply chains stretched across oceans. Commodities became invisible line items on shipping manifests. A manufacturer in Ohio didn’t need to think about where his zinc came from. A tech company in California didn’t think twice about the silver in its components. The system delivered for decades, and everyone stopped asking what would happen if it didn’t.

The embargo lasted five months. But it had exposed something far deeper than a temporary disruption in oil supply. The postwar financial system was already cracking — Nixon had closed the gold window two years earlier, effectively ending the Bretton Woods agreement that had anchored global trade since 1945. The government had been printing money to fund the Vietnam War and an expanding welfare state. Inflation was already running well above historical norms.

And yet, for nearly a decade, the political class doubled down on their failed policies.

Price controls. More spending. More money printing.

Gerald Ford’s answer was a lapel pin — the WIN button, for “Whip Inflation Now”. Somehow that didn’t do the trick.

Jimmy Carter asked Americans to turn down their thermostats and, in his infamous “malaise” speech, essentially told the country to accept a lower standard of living. Meanwhile inflation kept rising, the economy kept stalling, and a second oil shock in 1979 following the Iranian Revolution made it all worse.

It wasn’t until Paul Volcker at the Federal Reserve raised interest rates to 20% — and the Reagan administration backed him up with genuine spending discipline — that confidence was restored. It took the better part of a decade, and a willingness to impose real economic pain, to clean up the mess.

But it worked. What followed was the longest peacetime expansion in American history — and with it, the lesson of the 1970s faded from memory.

Cheap goods flowed from China. Energy markets stabilized. Supply chains stretched further and grew more complex than ever before.

The assumption that essential supplies would always flow freely reasserted itself quietly.

The gas lines in 1973 were an early warning. They told us that the system had single points of failure — chokepoints, whether physical like the Strait of Hormuz or political like an OPEC conference room, where a single decision could cut off supply to entire continents.

The postwar order survived the 1970s — but only by striking a new bargain. The petrodollar system, in which Saudi Arabia agreed to price oil exclusively in US dollars in exchange for American military protection, gave the architecture a second life. It kept the dollar at the center of global trade and it kept the oil flowing.

But it was a patch, not a fix. The underlying fragilities — the chokepoints, the dependencies, the assumption that political arrangements made in one era would hold forever — never went away. They were just papered over.

Now we are seeing the signs of another unraveling. It is no surprise that governments and corporations around the world are suddenly rethinking where their critical supplies come from.

And for producers of essential commodities in the Western Hemisphere — far removed from the contested shipping lanes of the Middle East — that shift in thinking provides significant opportunity.