Oil shocks are sudden, prolonged changes in worldwide prices of crude oil.
The second oil shock happened in 1979-80, after Iran, a major oil producer, clamped down on oil production and nationalised foreign oil companies after an Islamic Revolution led by Ayatollah Ruholla Khomeini. The three other oil shocks have happened thereafter. One occurred after Iraq s invasion of Kuwait, followed by the Gulf War, which disrupted the international oil economy for a few months. Unlike most other commodities apart perhaps from diamonds the global price Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. These nations comprise OPEC, producing 40 per cent of the world s crude oil and nearly three quarters of all the oil that is traded worldwide.