Professor Peter Newman AO and Professor Ray Wills
On March 9, oil prices crossed US$ 100 a barrel for the first time in almost four years as the war in the Middle East between the US and Israel on one side and Iran on the other continued to escalate with no immediate end in sight.
Oil price shocks triggered by conflict in the Middle East have historically reshaped global energy systems. But the latest tensions around the Strait of Hormuz are unlikely to produce a long-term return to high oil prices.
The first oil crisis in 1973 shaped the lives of baby-boomers. The price of oil quadrupled overnight as Arab oil exporters targeted Canada, Japan, the Netherlands, the UK and the USA. The second oil crisis, in 1979, followed the Iranian Revolution and panic buying set in as the oil price shot up. Then the 1980-88 Iran-Iraq war reduced global oil supply even further, so the price rose dramatically right through the 1980s.
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