Source: Energy Information Administration, Interagency Database and Projections Working Group. Since 2010, the EIA maintains a monthly database about oil supply disruptions.
Real Price of Oil and Major Disruptions in World Oil Supply, 1950-2016
Oil prices can be affected by a number of factors, either related to its supply or demand. While demand is relatively stable and predictable, there are a number of factors impacting supply, such as geopolitics. Such events can take place suddenly, causing disruptions since they create uncertainties about future oil supplies, which are reflected in oil prices. This is particularly influenced by the rather low elasticity level of supply and demand since in both cases, it can take years for the market to adjust. A large fluctuation in the oil price provides a strong incentive to find and use additional oil reserves as well as improve the energy efficiency of the demand on the long term.
Prior to the 1973 OPEC Embargo, disruptions in oil supply had no discernable impacts on oil prices. During that period, oil production was dominated by the United States, which provided 52% of the world's oil in 1950, but by the 1970s the United States was running out of additional capacity. The early 1970s were pivotal as the balance of power shifted to OPEC, since they accommodated most of the supplementary oil production derived from rising demands in developed countries. The Iranian Revolution of 1979 and the Iran / Iraq War a year after caused major disruptions in global supply, which was linked to substantial rises in oil prices. There were also some disruptions in the 1990s, such as the Iraqi invasion of Kuwait, but had limited impacts on oil prices since there was an adequate level of supply. However, from the mid 2000s tightening supplies due strong growth in the demand and political instability were associated with a rise in oil prices. The financial crisis of 2008-2009 forced OPEC to cut production in an attempt to stabilize oil prices. This also coincided to ongoing political instability in the Middle East and North Africa, such as the Arab Spring of 2011, that contributed to the Libyan and Syrian civil wars. By the 2010s, about 2 million of barrel per day of oil production was considered to be disrupted at any given time.