By R Ambardar 
Article Word Count: 421 [View Summary] Comments (0)
History has witnessed some incidents which have resulted in interruptions to world crude oil supplies. Year 1972 has been significantly important for crude supplies in the world. The epicentre of power was shifted from Texas, America to OPEC (Organization of Petroleum Exporting Countries) during this year. Post 1972 there have been two major incidents which would be worthwhile mentioning due to the impact they has on global crude economy.Yom Kippur War involving Israel, Syria and Egypt:
On October 5th, 1973 Syria and Egypt attacked Israel due to their prolonged political differences. Israel had support of United States of America and many other western countries during this war. As a result of this support many oil producing countries of the Middle East region (including Iran) imposed an oil embargo on countries which came forward in support of Israel. Due to this embargo the oil production took a hit of around 5 million barrels per day. Other oil producing countries tried to bridge this gap but were only able to provide extra 1 million barrels per day.
There was a net shortfall of 4 million barrels/day in oil supply which continued till March 1974. During this time period the prices of crude increased by more than 400% and reached $ 12/barrel from $ 3/barrel. If world needed any reassurance on shift of powerbase of crude from America to Middle East it was provided during this period as America failed to exert any influence on increasing oil prices.
Iran and Iraq War:
Yet again in the year 1979 and 1980 world was faced with a situation challenging the crude supplies. As a result of Iranian revolution in 1979 the production of crude in Iran has almost halted. This sudden decrease in oil supply again led to unprecedented price increase.
In the year 1980 when things were beginning to settle down in Iran and it was getting close to pumping 4 million barrels of oil per day another tragedy struck them. In September 1980 a weakened Iran was attacked by neighbouring Iraq as a result of which both countries had to suffer. The total combined (Iran and Iraq) capacity of 7.5 million barrels per day was reduced to only 1 million barrel per day. The crude prices also went for a big toss, in this short time they again raised from $ 14/barrel in 1978 to $ 35/barrel in 1981.
