Publications: Notes at the Margin

Embargo Redux (October 13, 2025)

Eight days short of the Arab oil embargo’s fifty-second anniversary, China announced a new embargo, one that could affect the world economy much more profoundly than the 1973 action. And once again, no one noticed.

 

On October 19, 1973, a New York Times front-page headline read, in bold print, “Israeli tanks battle to widen wedge on Egypt’s side of Suez; Kosygin Meets Sadat in Cairo.”[i] Buried below the fold on the same page was this headline: “Saudi Cut Oil Output 10% to Put Pressure on U.S.”

 

Eight days short of the Arab embargo’s fifty-second anniversary, the Times front-page headline announced, “Joy, Relief and Worry as Gaza Truce Nears.” One had to turn to page B1 of that issue to find this headline: “China Clamps Down Even Harder on Rare Earths.”[ii]

 

Once again, a major news source banished a potentially earth-shaking economic development in favor of events in Isreal and the Middle East. Today, most observers would likely say the Arab embargo had far greater long-term economic effects than the Yom Kippur War.

 

Fifty years from now, historians may similarly argue that China’s actions on October 9 and 10, 2025, had greater consequences for global economic activity, political stability, and long-run development than the negotiations to resolve the dreadful war in Gaza.

 

If exercised, China’s new regulatory actions will check economic growth in the OECD, creating increased political discord and almost certainly depressing global oil use. Meanwhile, China may have abandoned its efforts to support world oil prices.

 

The Chinese government seems bent on forcing the United States and other countries to open their markets by threatening to withhold the keys to economic growth. If it succeeds, the easing of tariffs could bring recession as Chinese exports flood the world. A global recession could also occur if China freezes its rare-earth exports. Oil consumption could decrease in either scenario.

 

To receive the full report along with future issues of Notes at the Margin, please Contact Us or send us an Information Request for subscription information.