Iran’s 1979 revolution sparked a second oil shock—and reconfigured global energy markets

OPEC’s 1973 embargo sparked the first global energy shock

In October 1973, Arab OAPEC countries stopped or significantly reduced oil exports to nations backing Israel during the Yom Kippur War. Crude prices nearly quadrupled, sparking global shortages, economic recession, rationing, and major energy policy reforms.

Oil shocks, war, and the 1970s crisis that remade American energy and economics

The oil crises of the 1970s—fueled by Middle East conflict and OPEC’s dominance—triggered inflation, price controls, and policy failure. But they also accelerated fracking, alternative energy, and the rise of free-market economics.

The 1979 Iranian Revolution inspired other Islamist movements and alarmed Sunni governments

By establishing the world's first modern Islamic theocracy, the revolution inspired Islamist movements across the region and alarmed Sunni Arab governments. The resulting rivalry between Shia Iran and Sunni Saudi Arabia has since fueled proxy conflicts in Lebanon, Iraq, Syria, and Yemen that persist today.

A report found that the 2026 Iran war is the largest oil supply disruption in history

Oil flow through the Strait of Hormuz—responsible for roughly 20% of the world's oil supply—plummeted from 20 million barrels a day to "a trickle" during the initial weeks of the conflict between Iran, Israel, and the United States.

Beyond oil, the Iran war is pushing up costs on fertilizer, prescriptions, and mortgages, too

Gas is up 27% since fighting began, but the Strait of Hormuz also carries a third of the world's fertilizer, petrochemicals used in generic drugs, and helium for semiconductor manufacturing. Mortgage rates have climbed back above 6.4%, and economists warn $130 oil could tip the U.S. into recession.

Mosaddegh nationalized Iran's oil industry in 1951, threatening Western control of the country's resources

Before nationalization, British companies controlled most of Iran's oil wealth, with little revenue returned to Iranians. Mosaddegh's decision made him a national hero at home but triggered a Western-led embargo and ultimately contributed to the coup that removed him from power.

See a timeline of the events that shaped the Iranian Revolution

From a defamatory newspaper editorial that sparked protests in January 1978 to Khomeini's return from exile and the Shah's flight from Iran in 1979, this timeline traces the rapidly escalating chain of events—protests, crackdowns, and political collapses—that toppled one of the Middle East's most powerful monarchies.

Lessons from the 1973 energy crisis still echo in today’s geopolitical battles over oil

The video from the Economist highlights how energy supply disruptions can be weaponized—just as in 1973, today’s gas cutoffs (Russia throttling supplies to Europe after their invasion of Ukraine) reveal the ongoing importance of strategic energy resilience.

Iraq invaded Iran in 1980, drawing the new Islamic Republic into a devastating eight-year war

Just a year after the revolution, Saddam Hussein invaded Iran, hoping to exploit its post-revolutionary instability. The brutal conflict killed hundreds of thousands in one of the century's deadliest conflicts and forced Khomeini's government to consolidate power.

Watch contemporary footage covering the US-backed Shah of Iran fleeing the country in the face of the 1979 Iranian Revolution

Oil prices have been volatile for decades

This explainer shows oil’s rollercoaster: OPEC-led embargoes in the 1970s, shale surges in the 2000s, and the US flip to becoming a net oil exporter in 2020.

In 1979, Iranian students seized the US Embassy in Tehran, holding 52 Americans hostage for 444 days

Outraged by the US decision to allow the exiled Shah to enter the United States for medical treatment, student protesters stormed the embassy in November 1979. The crisis paralyzed the Carter presidency and ended with a negotiated release on the day of Ronald Reagan's inauguration.

Iranians voted overwhelmingly to establish an Islamic Republic in March 1979

Just weeks after Khomeini's return, Iran held a national referendum to replace the monarchy with an Islamic Republic, and over 98% voted in favor (though the vote was criticized). The vote formalized the revolution's outcome, laying the foundation for a theocratic government that remains in place today.

The Iranian Revolution relied largely on nonviolent tactics

Despite thousands of unarmed protesters killed by the Shah's forces, the revolution relied overwhelmingly on nonviolent tactics, including strikes, demonstrations, and civil disobedience, with up to 9 million Iranians peacefully taking to the streets, making it one of history's largest protest movements by population percentage.

Iran-Iraq war drained over $1T from the combined economies of Iran and Iraq

Across eight years (1980-88), Iran and Iraq each lost about $500 B in GDP, infrastructure destruction, military expenses, disrupted oil exports, and mounting debt—totaling over $1 T in economic damage.

Hear how the US and Iran went from close allies to bitter adversaries after the 1979 revolution

Covering five decades of conflict and diplomacy, this podcast examines key flashpoints—from the Iran-Iraq War and the 1983 Beirut bombings to Iran's use of proxy forces and cyberattacks—offering insight into one of the most consequential and complex rivalries in modern geopolitics.

Oil markets are seeing higher costs and lower prices amid tech breakthroughs

Experts say oil demand has not yet reached its peak. Recent technological breakthroughs in the oil industry include advances in drilling and extraction, as well as subsurface technologies.

Iran's Revolutionary Guard Corps is independent of Iran's regular army and is one of the most powerful and influential military-political organizations in the Middle East.

Oil prices spiked when Russia invaded Ukraine in 2022

The price of a barrel of Brent crude experienced volatility in the early 2020s. This chart shows price spikes at the beginning of the pandemic and again when Russia invaded Ukraine.

View a breakdown of worldwide oil production since 1900, mostly led by the US

When analyzing the production of crude oil, shale oil, oil sands, and condensates since the start of the 20th century, Saudi Arabia produced more crude oil only in 1977, from 1979 to 1981, and from 1991 to 2016. Nations such as Iraq and the United Arab Emirates produced much smaller quantities than both Saudi Arabia and the US.

Air pollution in war-torn Iran unleashes invisible toxic threats

Burning oil depots and bombed buildings are endangering the health of millions of people during the 2026 attacks. Heavy metals from munitions and other damaged materials are going airborne, but the exact health implications depends on dose, wind currents, and other factors including preexisting health conditions.

The 2007 animated film 'Persepolis' captures the Iranian Revolution through a child's eyes

The critically acclaimed film, based on Marjane Satrapi's graphic memoir, traces Iran's transformation from the Shah's rule through the revolution and its turbulent aftermath, showing how seismic political change shapes ordinary lives.

COVID-19's shock to employment rates sparked some economists to fear deflation

COVID-19 simultaneously disrupted the supply chain and the labor market. Since the unemployment rate had hit record highs, some economists were worried that the supply chain would recover before the labor market. If that had happened, businesses would have been producing goods, but no one would have been able to buy them because they wouldn't have the disposable income to do so.

Markets have always recovered and hit new highs following crashes

The crash that preceded the Great Depression was the most severe the US has ever experienced. It was 28 times worse than the downturn that followed the Cuban Missile Crisis.

Venezuela is experiencing hyperinflation

Consumer prices in the country have risen at a fairly quick rate since 1983, but a series of policy miscalculations, falling oil prices, and other factors have sparked extreme levels of inflation since 2017, with citizens losing faith in the value of the national currency.

Economic stagnation and the arms race pushed the USSR toward collapse

By the 1980s, chronic economic stagnation and soaring military costs forced Gorbachev to launch sweeping reforms—perestroika and glasnost—to revive the Soviet system. Instead, openness fueled independence movements across the republics, accelerating the regime’s rapid downfall.

Ramadan tends to reduce Gulf productivity, but increases reported happiness

Economists have documented a measurable dip in productivity and output in Muslim-majority countries during Ramadan. But surveys consistently show the opposite on subjective well-being, with people reporting they feel better and more connected.

The price of gas is a composite made up of several different factors, with the federal gas tax making up less than 20% of what drivers pay at the pump.

The United States has had a tumultuous relationship with Cuba since its 1959 revolution, highlighted by a nuclear crisis and a decades-long trade embargo.

Jimmy Carter signed a 1978 bill that legalized home brewing, a move credited with kick-starting the craft beer industry.

The US dollar is the most widely circulated currency in the world, and is involved in nearly 90% of global transactions

Some renewable energy sources may weaken the resiliency of electric grids by removing outage buffers provided by coal- and natural gas-fired plants, which provide the system with more time to find a new power source if a plant goes down.

The identity of the Tank Man in the iconic photo from the 1989 Tiananmen Square protests remains unknown and was possibly killed.

'Shogun,' a 1980s TV series, helped popularize sushi in the US by stimulating an American interest in Japanese culture.

Volcanic activity may have triggered the Black Death by spewing gases that led to crop failures in Europe, thus forcing the import of grain ships with plague-infested fleas.

After the Boston Tea Party, colonists switched to coffee, which became the main morning drink for revolutionaries.

Exploring the Larry Bird punch that almost changed March Madness

See a ranking of the best (and worst) Federal Reserve Chairs since 1914 out of the 16 men and women who have held the office since.

Fast-casual restaurant Chili's is experiencing a resurgence, with its parent company recently reporting a nearly 32% increase in sales, thanks to passionate Gen Z fans on TikTok.

Sunflowers have long been a symbol of nuclear disarmament because they can extract large amounts of radioactive cesium from soil.

The name 'Silicon Valley' arose from the founding of Shockley Semiconductor Laboratory in Fairchild Semiconductor in 1956-57, founded near Stanford University in Palo Alto

In 1984, Operation Smash Hit intentionally crashed a 239-ton train into a nuclear waste canister at 100 miles per hour to prove the canister's safety, which remained completely intact and lost just 0.29 of its 100 pounds of pressure.

The Mona Lisa's celebrity status and repeated restorations have obscured what made the painting so revolutionary for its time

The distributor behind 'Rocky Horror' pulled the film from its scheduled national release, believing it would be a failure, though it eventually amassed a dedicated fanbase through midnight showings, a trend that continues over 50 years later.

An initial public offering or 'IPO' is the process of a private company becoming public by putting shares of the company on the stock market for purchase.

Waves off the coast of Nazaré, Portugal, can reach over 100 feet and are caused by the area's deep underwater canyon geography

In 1963, a basement renovation in Turkey revealed a passageway to a hidden, multilevel underground city that once housed as many as 20,000 people

Explore chaos in this simulation of two double pendulums, where small differences in the release angles produce wildly different outcomes.

Some researchers have labeled nomophobia, the fear of being without your phone, as 'the phobia of the 21st century.'

Famed poet TS Eliot rejected the manuscript for George Orwell's political fable 'Animal Farm,' writing that its criticism of authoritarianism was not 'the right point of view.'