The conflict in Iran continues, and while recent negotiations and a ceasefire offer a glimmer of light at the end of the tunnel, the future remains uncertain. When crises drag on, it’s easy to feel as though the chaos will last forever. We find ourselves asking: When will this end? While we cannot predict the future, history reveals a consistent pattern in how economies behave under stress. It isn’t a perfect forecasting tool, but it is a phenomenon that has emerged across countless crises and eras. It is called mean reversion.

What is mean reversion? In short, when conditions swing too far in one direction, forces begin to build that pull them back toward the average (the “mean”). This correction does not happen overnight, but the gravitational pull toward “normal” is almost always present.

A clear example is the oil crisis of the 1970s. Global supply was disrupted by political upheaval in the Middle East, specifically the 1973 OPEC embargo and the subsequent tensions of the Iranian Revolution. Supply plummeted, prices skyrocketed, and nations faced acute shortages.

In the Philippines, stories still circulate of people having to push their cars to the gas station after running dry in long, stagnant lines. For those living through it, the crisis felt permanent; there was a growing conviction that energy would remain scarce and expensive forever.

However, while the world was focused on the immediate catastrophe, it overlooked how global participants would react to these new incentives. Oil producers outside the Middle East, incentivized by high prices, ramped up production to capture profits. Consumers adjusted by using less fuel and shifting toward more efficient technologies, while governments pivoted toward conservation and alternative energy.

These shifts took time, but they gradually recalibrated the scales. By the mid-1980s, the situation had reversed. Oil prices crashed, and the fear of permanent shortage evaporated. Ironically, the very prices that caused the crisis created the conditions for its resolution. This is mean reversion in practice: extreme situations create the reactions that eventually pull the system back to center.

This pattern arises because people respond to incentives. The stresses of war eventually create a desperate desire for its end. Governments, businesses, and individuals are not static—they adapt. While individual shifts may seem negligible, collectively they create a massive force that pushes the system away from the extreme.

Mean reversion is not a guarantee. Permanent, irreversible damage is always possible. However, understanding this concept protects us from the panicked assumption that every extreme is a “new forever.” Most “unprecedented” events eventually recover, as evidenced by the fact that we are no longer living through the 1970s embargo, the 1997 Asian Financial Crisis, or the 2020 Covid-19 pandemic.

The present feels volatile, and it is natural to expect more of the same. But history suggests a more tempered view. Extremes create their own counterforces. Often, when things look their worst, the process of adjustment is already underway—even if it is not yet visible to the naked eye.

Predicting the future is impossible, but mean reversion is one of the most consistent patterns we have. It doesn’t remove uncertainty, but it reminds us that today’s extremes are likely part of a cycle. Over time, the very forces that pushed us to the edge may be the ones that pull us back.