Oil is mainly composed of hydrocarbons, and the formation process is very long. It is formed bit by bit in the stratum after hundreds of millions of years of transformation by the remains of ancient organisms accumulated in the sea or on land under high temperature and high pressure and through complex biological and chemical actions. Under the influence of buoyancy, these oil droplets slowly move upward along the formation or fault until they are blocked by the oil impermeable closed formation and stay, and more and more oil fields are formed.

Petroleum is known as "black gold". It can obtain gasoline, kerosene, diesel and other fuels and lubricants for various machines through refining. It can also obtain synthetic rubber, pesticides, fertilizers, medicine and paint through chemical process. It is widely used in all aspects of modern industry and is the "blood" of modern economy and even the whole society.

However, such a valuable resource is unevenly distributed all over the world. The Middle East has less than 9% of the world's population, but it accounts for more than 60% of the world's oil reserves. The world's major oil consuming regions are North America and Eurasia, where the oil reserves do not exceed 10% of the world's total. There is a serious imbalance between oil consumption and ownership. Oil consuming countries can only rely on a large number of imported oil to meet the huge domestic oil demand. However, the excessive dependence on oil limits the economic development of these countries. The oil crisis in the late 20th century makes this disadvantage more obvious, especially in the automobile industry. The gasoline used by cars accounts for about one third of the global gasoline consumption. The United States, Canada, Japan and Western Europe produce less than a quarter of the global supply of gasoline, but these countries consume far more than half of the world's gasoline production every year. The fuel consumption of motor vehicles is becoming a bottomless hole that ruthlessly devours oil resources. This has also prompted people to consider getting rid of their dependence on high-power gasoline engines and turning their attention to pollution-free and energy-saving electric vehicles.

Oil crisis is an economic crisis in the world or individual countries due to the impact of changes in oil prices. The three recognized oil crises occurred in 1973, 1979 and 1990 respectively.

The first oil crisis (1973-1974)

The first oil crisis

In October 1973, the fourth Middle East War broke out, which directly led to the first oil crisis. The two sides involved in this war are Arab countries and Israel. In order to combat the western countries that have always supported Israel, the Arab countries took joint action, took advantage of the West's dependence on oil, used oil as a weapon and dropped a heavy bomb in the western world.

On October 16, 1973, the organization of Petroleum Exporting Countries "OPEC" decided to raise oil prices. 24 hours later, the Arab oil producing countries among OPEC members decided to reduce oil production. A few days later, it began to impose an oil embargo on western developed capitalist countries. At that time, most of the oil consumed by the United States, Western Europe and Japan came from the Middle East. Oil price hikes and embargoes have caused an uproar in the western world, and the economies of many countries have been in chaos.

On September 14, 960, Iran, Iraq, Kuwait, Saudi Arabia and Venezuela established the organization of Petroleum Exporting Countries (OPEC) to jointly deal with Western oil companies. Its purpose is to coordinate and unify the oil policies of Member States and safeguard the common interests of Member States by the most appropriate means.

The oil embargo and the resulting public panic led to a surge in oil prices. Before the war broke out, the price of oil was only $3 a barrel. Only two months later, the price of oil was close to $10. The shortage of oil has greatly increased the balance of payments deficit of Western powers and dealt a heavy blow to the economies of developed industrial countries. As a result, industrial production in the United States fell by 14% and that in Japan fell by more than 20%. The economies of almost all oil dependent industrialized countries have been impacted, and the world has experienced the most serious economic crisis since the Second World War.

Oil is not only the blood of the world industry, but also the lifeblood of the automobile industry. After the Arab oil producing countries implemented the oil embargo, the oil gap in the United States, known as the "country on the wheel", reached 12%, more than 20000 gas stations were closed, and there was a long line in front of the surviving gas stations. U.S. auto production fell for two consecutive years in 1974 and 1975, with a year-on-year decline of 19% and 9% respectively. As fuel prices rise, Americans who used to use oil such as water have to be frugal. Many people begin to walk to work, and housewives also consider "carpooling" when they go out. People have not yet breathed from the oil crisis, and the second oil crisis occurred six years later.

The second oil crisis (1979-1980)

The second oil crisis

In 1978, the Islamic revolution that overthrew the Pahlavi dynasty took place in Iran, resulting in severe social and economic turmoil. From the end of 1978 to the beginning of March 1979, Iran's oil exports were suspended for more than 60 days. The sudden reduction of crude oil supply resulted in a gap of 5 million barrels of crude oil per day in the international crude oil market, accounting for about 10% of the total world oil demand at that time, triggering a rush to buy, and the oil price rose rapidly.

On September 20, 1980, Iraq sent planes to bomb Iran. The Iran Iraq war broke out, and the oil production of the two countries came to a complete standstill. The world's oil supply, which has not yet recovered, has been hit hard again. The already precarious relationship between supply and demand has been hit head-on, production has decreased sharply and oil prices have risen. Global oil production was once only one-fifth of that before the Iran Iraq war. Other major oil producing countries, on the other hand, fought their own battles and took turns to raise oil prices. This is truly "adding fuel to the fire" for the western economy, which is already in crisis. During this period, the oil price rose all the way from $13 a barrel to $39 a barrel by the end of 1980.

The oil crisis has also become an important reason for the overall recession of the western economy in the late 1970s. The US government estimates that the US GDP fell by about 3% in the second oil crisis. Global auto sales were also affected, falling for four consecutive years from 1979 to 1982, prompting the auto industry to consider the possibility of replacing gasoline drive with other driving methods.

Third oil crisis

Third oil crisis

On August 2, 1990, Iraq invaded Kuwait and the Gulf War broke out. The Gulf War was actually an oil war. Within three months after Iraq occupied Kuwait, the international oil price broke through $40 from $14 a barrel. After the war, Iraq suffered international economic sanctions, its foreign crude oil output was interrupted, and the international oil price rose to $42 a barrel. The US and UK economies accelerated into recession, and the global GDP growth rate fell below 2% in 1991. However, the high oil price did not last long. The International Energy Agency launched an emergency plan to put 2.5 million barrels of reserve crude oil on the market every day. OPEC led by Saudi Arabia also increased production rapidly, which soon stabilized the world oil price. Compared with the previous two oil crises, the impact of the third oil crisis on the world economy is much smaller.

The fourth oil crisis is emerging

The average price of crude oil per barrel in the international market in 2002 was US $24, US $31.5 in 2003, US $41.5 in 2004, US $56.7 in 2005, US $66.2 in 2006 and US $72.5 in 2007. In the summer of 2008, the price of crude oil in the international market once rose to the historical "sky high price" of nearly $150 a barrel, fell rapidly in the second half of the year and fell to about $40 a barrel at the end of the year. It rebounded again in 2009. By the end of October 2009, the price of crude oil in the international market closed at US $75.53. Crude oil prices have risen and fallen all the way to the present, and the fourth oil crisis is beginning to appear.

Since 1973, the oil crisis has come and gone, which cannot completely disappear, and every time it comes again, it will be more rapid and create a new oil price record. Therefore, countries around the world have accelerated the pace of adjusting the energy consumption structure, and vigorously develop energy-saving and environment-friendly new energy vehicles.