by R. Bradley, Aug 22, 2026 in WUWT

A while back, Alex Tabarrok with Tyler Cowen recorded “Oil Shocks, Price Controls and War” at the Marginal Revolution website. They advertised it:

Our second podcast on the 1970s titled Oil Shocks, Price Controls and War is now available! Here’s one bit:

Tabarrok: …Sheikh Ahmed Yamani, in a famous statement, he was the oil minister for the Kingdom of Saudi Arabia, he’s a leader of OPEC, he says on October 16th, this is 10 days after the war begins, “This is a moment for which I have been waiting for a long time. The moment has come. We are masters of our own commodity.” They raise the price of oil. Oil production falls by about 9 percent to 10 percent. That doesn’t seem on the surface to be a huge amount, but it reveals something which people had not been prepared for, and that was the inelasticity of oil demand.

I would put it this way. I think this is the key idea here. Almost accidentally, the exporting countries had discovered that the demand for oil was more inelastic than anyone had ever realized. The main lesson they drew before 1973, the oil exporting countries thought that the only way to increase revenues was to produce more. After 1973, they learned that an even better way to increase revenues was to produce less.

Here’s another:

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