Andrew McKillop: Oil prices … another Iran crisis?

Under the impact of US humiliation, and slow recovery in Iranian oil production due to the Khomeini revolution, oil prices then moved to around $42/bbl in 1979 dollars, or about $105/bbl in today’s dollars.

Gold prices tracked this explosion, attaining well over $900/ounce in 2004 dollars.
At the time, there was in fact considerable spare oil production capacity, worldwide. In overall terms, this was a political crisis, rather than oil supply crisis. At no time was there a physical shortfall of more than about 2.5 million barrels/day … although this supply cut was particularly high in late 1979-early 1980, during the Northern hemisphere’s winter.

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