Foresite looks back at a defining moment in economic history and draws a line to something happening right now. The goal isn’t to predict the future — it’s to recognize the pattern.

1973: The Oil Embargo That Changed How America Shops

On October 17, 1973, the Organization of Arab Petroleum Exporting Countries announced an embargo on oil exports to the United States. The move was a response to U.S. support for Israel during the Yom Kippur War. What followed was one of the most disruptive economic shocks in American history, and it left a permanent mark on the commercial real estate landscape.

In a matter of weeks, crude oil prices quadrupled. Gas lines stretched for blocks. Inflation, which had already been climbing, accelerated sharply. Consumer confidence fell off a cliff. The U.S. economy entered a recession that lasted until early 1975, with GDP contracting and unemployment climbing above 9 percent.

For retail commercial real estate, the consequences were significant and lasting. The enclosed regional mall, already the dominant retail format of the era, suddenly faced an existential question: if consumers couldn’t afford to drive, would they come? The answer, in the short term, was no. Mall traffic dropped. Discretionary retailers contracted. The energy costs of operating climate-controlled enclosed centers, previously an afterthought, became a serious operating expense concern for landlords and tenants alike.

But the embargo also accelerated structural shifts that were already underway. Developers began favoring smaller, open-air neighborhood centers close to residential density — formats that required less energy to operate and shorter consumer commutes to reach.

Grocery-anchored retail, already a staple of suburban development, gained further credibility as a defensive and necessity-driven product type. Strip centers and community centers oriented around everyday needs proved far more resilient than their mall counterparts.

The lesson embedded in that era is one that serious retail CRE investors still carry with them today: in times of energy shock and economic disruption, convenience wins. Proximity to the consumer matters more than prestige. The category we now broadly call “necessity retail”, grocers, pharmacies, and service tenants, hold their occupancy through cycles that hollow out discretionary-heavy centers. The 1973 embargo didn’t kill retail real estate. It sorted it.

2026: A New Oil Shock and What it Means for Retail CRE

On February 28, 2026, a U.S.-led military strike against Iranian nuclear facilities triggered a rapid escalation in the Middle East. Within weeks, WTI crude oil climbed toward $100 per barrel, a roughly 50 percent increase from pre-conflict levels. Brent crude crossed $106. The price spike was immediate, visible, and personal. Texas drivers began paying more at the pump almost overnight.

The parallel to 1973 is imperfect, it always is, but the direction of pressure is familiar. Consumer sentiment, already softening from tariff-driven inflation concerns, fell further. The University of Michigan Consumer Sentiment Index dropped to 55.5 in March 2026, landing in just the second percentile of all historical readings. The Conference Board’s Expectations Index has sat below the traditional recession-signal threshold of 80 since February 2025.

Here is where the comparison to 1973 gets genuinely instructive, and where San Antonio and Austin diverge meaningfully from the national story. Texas is not simply a consumer of energy. It is a producer. Rising oil prices have historically been a net positive for the Texas economy, supporting employment in the energy sector, filling state revenues, and sustaining the income levels of a large segment of the workforce. The Texas Comptroller distributed sales tax revenues running 2 to 2.5 percent above prior-year levels through the first quarter of 2026. Retail sales in the state are growing even as consumer sentiment softens nationally.

That divergence matters for retail leasing decisions. The tenants who are expanding in this environment are not behaving like consumers who expect a prolonged downturn. Aldi, Tractor Supply, Dollar General, and value-oriented concepts are opening aggressively. H-E-B already opened a new Culebra Road location in January 2026 and has another store under construction in Converse. In San Antonio, seven new concepts are scheduled to open at The Shops at La Cantera in 2026. These are not signs of a market in retreat.

What the 1973 lesson does caution us about is the composition of the tenant base in any given center. Discretionary retail such as apparel, electronics, home furnishings, and entertainment is where the pressure will show up first if energy costs remain elevated and consumer confidence stays depressed. Necessity and value retail will absorb the headwind better. Landlords evaluating tenant mix, reviewing lease renewals, or making re-tenanting decisions in the coming quarters would do well to look at the 1973 playbook: weight the portfolio toward proximity, necessity, and value. Those formats outlasted the embargo. They are likely to outlast this moment too.

One important difference is worth noting. In 1973, the U.S. had no meaningful domestic energy alternative to OPEC supply. Today, Texas is the largest oil-producing state in the country. If elevated prices hold, capital investment in Texas energy will follow, and history suggests that energy booms have a way of spilling into retail sales, new rooftops, and ultimately, new demand for the kind of neighborhood centers that serve the people who do that work. The same geopolitical event that is pinching the national consumer may, over time, deepen the economic case for retail investment in Central Texas.