1979 ENERGY CRISIS
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The second 1970s oil shock, sparked by turmoil in Iran, that caused supply disruptions, price spikes, and gasoline shortages.
Summary
The 1979 Energy Crisis was the second major oil shortage of the 1970s, triggered by the Iranian Revolution and subsequent Iran-Iraq War. When Iran's oil production collapsed due to political upheaval, global oil supplies tightened dramatically, causing crude oil prices to more than double from $15 to over $35 per barrel. This crisis led to long gas station lines, fuel rationing, and significant economic impacts including inflation and recession in many countries. Unlike the 1973 oil embargo which was politically motivated, the 1979 crisis stemmed from actual production disruptions in one of the world's major oil-producing nations.
Usage Context
Essential for understanding 1970s economic history, the relationship between geopolitics and energy markets, the development of modern energy policy, and the economic causes of late 1970s stagflation.
Common Confusions
- Confusing the 1979 crisis with the 1973 oil embargo - they had different causes
- Thinking it only affected the United States when it was a global crisis
- Believing it was solely caused by OPEC price manipulation rather than actual supply disruption
- Assuming the crisis ended quickly when effects lasted into the early 1980s
