The 1979 oil crisis doubled crude oil prices within a year, triggering global recessions and reshaping energy markets for decades.
Key Facts
- Global oil supply decrease
- ~4%
- Peak crude oil price
- $39.50 per barrel USD
- Price increase duration
- 12 months
- Price normalization
- Mid-1980s return to pre-crisis levels
- Trigger event
- Iranian Revolution (1979)
- Compounding event
- Iran–Iraq War began 1980
By the Numbers
Cause → Event → Consequence
The Iranian Revolution of 1979 severely disrupted oil production in Iran, one of the world's major petroleum exporters. Although the resulting drop in global oil supply was only around four percent, widespread panic in oil markets amplified the impact far beyond what the physical shortage alone warranted.
Oil markets responded to the supply disruption by driving crude oil prices sharply upward, more than doubling them to $39.50 per barrel within 12 months. The onset of the Iran–Iraq War in 1980 further reduced output from both nations, compounding shortages and causing fuel scarcity reminiscent of the 1973 oil crisis.
The price shock triggered economic recessions across the world. Oil prices remained elevated until the mid-1980s, after which they declined steadily as new producers — including the Soviet Union, Mexico, Nigeria, and Venezuela — expanded output and North Sea and Alaskan oil flooded the market, leading to a roughly 60% price fall by the 1990s.