Background
The 1973 oil crisis and the 1979 oil crisis turned oil from a cheap to a very expensive energy source. During the 1973 energy crisis, the price of oil quadrupled. Oil never returned to pre-1973 levels, either in real or nominal terms, even during the 1980s glut.
The nominal price continued its slow increase after the crisis ended. Six years later, the price more than doubled during the 1979 energy crisis. OPEC and Saudi Arabia artificially raised the price of oil several times in 1979 and 1980. Also during this time, several OPEC members significantly lowered their production levels, the Iran hostage crisis occurred, and the Iran–Iraq War began.
There was fear that the world's oil market supply was tenuous, causing the price of oil to escalate and that OPEC would dictate very high prices in a shortage.
Read more about this topic: 1980s Oil Glut
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