

Global Commodities: The unintended consequences of destabilizing Iran
Jun 20, 2025
The podcast delves into how regime changes in oil-rich countries like Iran can dramatically influence global oil prices. It highlights historical shifts, revealing that prices can spike by as much as 76% during upheaval. The discussion ties in geopolitical conflicts, examining how events such as the Iranian Revolution and Libya's 2011 crisis lead to significant production drops. The insights underscore the lasting impacts of political instability on global oil supply and market volatility.
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Destabilization Drives Oil Spikes
- Regime destabilizations in oil countries can cause significant oil price spikes and supply disruptions.
- These shocks are often short-lived unless major producers are involved, which leads to longer lasting effects.
Oil Prices Spike After Regime Changes
- Since 1979, regime changes in large oil producers typically caused 76% peak oil price increases.
- Production drops average 23% over six months, sustaining elevated prices due to slow recovery.
Iranian Revolution Oil Shock
- The 1979 Iranian Revolution cut oil output from 5.3 to 1.4 million barrels per day by 1981.
- The supply shock more than doubled prices and caused a global recession lasting until the mid-1980s.