Robert Stobaugh
Essay
Special
1979
Consider the plight of some distinguished oil expert, a modern-day Rip Van Winkle who had been lulled in the summer of 1978 into a long nap by the then widespread predictions for the 1980s--ample oil supplies at constant or even declining real prices. By the beginning of 1980 he would have awakened to a thoroughly disorienting situation. He would have thought that the year was 2000, for 20 years of anticipated change had been telescoped into one. From $12-13 per barrel in late 1978, oil prices had risen to the $30-35 range, a level that many 1978 predictions had not anticipated until the year 2000. And political threats to the world's oil supply that had been discussed as potentially serious five to ten years in the future had become visibly critical in 1979 alone. It was a fateful 18 months.
Essay
Spring
1979
Almost exactly five years after the first oil shock, the second began. The parts of the puzzle are arranged quite differently this time around, but the two central pieces are the same. The upheaval in Iran has meant an interruption of supply and a loss to world production already as great as that from the 1973 embargo; the tight world oil market which had been predicted, just last fall, only for the mid-1980s or beyond is already upon us. And, as a direct result, the OPEC countries-which in December 1978 had already announced a substantial price rise during 1979-are further increasing prices.
