(Reuters) - Oil remains within sight of a record hit in mid-June of nearly $140 a barrel — a rise of 40 percent since the start of the year that has prompted many to suggest the world is experiencing a third “oil shock.”
Earlier this month the head of the International Energy Agency Nobuo Tanaka said the world was in a third energy crisis and called for an “energy revolution” to cut demand.
The previous crises were caused by a sharp reduction in supply preceded by political turbulence and war.
This time round, booming demand from emerging Asian and Middle Eastern economies has pushed the price of oil to real-money highs even as consumption slows in the developed world.
* 1973 - The first oil shock was caused by an Arab oil embargo directed at Israel’s supporters in the Arab-Israeli war: primarily the United States but also Japan, the Netherlands, Portugal and South Africa.
The price of oil quadrupled to almost $12 a barrel. Sudden inflation quickly infected the economies of other industrialised countries.
The crisis ushered in an era of oil price forecasting, encouraged conservation and the search for diversified sources of oil and furthered research and use of alternative fuels.
* 1979 - The second oil shock followed the Islamic Revolution in Iran and was keenly felt in top consumer the United States which had to ration fuel. All exports from Iran stopped, resulting in a loss of about 5 percent of overall supply and a price spike of 150 percent. Oil averaged just under $32 a barrel in 1979.
* Iran-Iraq war - Battle between the two major oil producers initially cut 4 million barrels per day from the market, or 8 percent of world demand. Oil averaged about $37 in 1980.
* The international oil companies had built substantial inventories after 1979 and Saudi Arabia ramped up production to help avert a full-scale supply crisis.
* Post-1970s - After the twin crises of the 1970s, over-production caused a glut, recession hindered demand and prices sank.
Japan, which had received some 90 percent of its oil from the Middle East, recovered particularly well, creating an automobile industry based on fuel efficiency and compact designs and focusing more on technologically advanced industries such as electronics and robotics.
* 2008 - With oil prices rising nearly sevenfold in as many years, the real-money cost of crude is higher than ever leading many to speak of a third oil shock.
Fuel demand from newly industrialised countries in Asia is robust, even as governments cut subsidies.
In the last three months, energy-hungry China and India, as well as Indonesia, Bangladesh, Vietnam and Singapore have raised the price of gasoline by more than 10 percent. Malaysia upped the cost by 63 percent.
It is in these economies that inflationary pressure is most obvious, but it is most dangerous in slow-growth countries.
Stagflation, the combination of slower growth and rising costs, is stalking the United States and Europe.
Protests have erupted from Spain and Greece to Israel and Nepal as farmers, fishermen and hauliers complain about rising fuel and food costs.
Reporting by Alastair Sharp; editing by Peg Mackey