Drivers Analysis of Second Oil Crisis Focusing on the Economic Impact of Developing Countries in Asia

Abstract

As a strategic commodity, oil is essential to the industrial economy and occupies an important position in international competition and national economic development. Price changes in oil affect every aspect of the economic sphere of each country. The three oil crises in history have become major factors in the world oil market prices. Compared with the other two oil crises, the second oil crisis in 1970 was due to the interruption of Iranian oil exports. The market set psychological expectations for the unsteady oil supply, which led to a surge in oil prices. The study of the second oil crisis is of great significance to Asian countries because Asia, as a region of rapid economic development, has an outstanding internal conflict between oil supply and demand, and the causes of the second oil crisis and its impact on the development of Asian countries are also a major concern for countries around the world. This paper examines the characteristics, causes, and manifestations of the second oil crisis from the perspective of industrial policy through case comparison and other methods. Then, this paper finds that the motivations of the second oil crisis are mainly the decline in oil production capacity caused by the Islamic Revolution and countries' oil reserve plans, which exacerbated the oil crisis. The economic impact of the second oil crisis on developing countries in Asia is mainly reflected in the asymmetry of supply and demand, squeezing domestic economic construction funds, and causing a national debt crisis in oil-poor countries in developing countries.