Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.
On Oct. 31, 1978, Iran’s oil workers organized a strike following failed negotiations over wages and political change. An energy crisis ensued.
Where The Market Was
The S&P 500 traded around 94.71, and the Dow Jones Industrial Average traded around 2,992.37.
What Else Was Going On In The World
“Halloween” hit the box office, South Yemen adopted its constitution and Pope John Paul II celebrated his second week as pontiff.
Oil Workers Go On Strike
A mass strike protested the region’s martial law, the detention of political prisoners and relatively low wages. On day one, oil production dropped from 5.3 million to 2 million barrels and forfeited $60 million in revenue — a significant loss for the world’s second-largest oil exporter.
Throughout the next few months, production plunged to 250,000 barrels. That was half the quantity needed to meet Iran’s domestic demand, leaving nothing left for exports.
Other members of the Organization of Petroleum Exporting Countries profited from the resulting rise in oil prices.
The decade had been rife with oil trouble. Five years earlier, OPEC leveraged its oil resources in international politics. A series of cuts prompted a quadrupling of oil prices, and Western nations suffered shortages and rationing.
This Week In The Oil Market: Iran Loses Customers, US-Saudi Tensions Rise
Saudi Arabia Mixes Oil, Politics After Journalist's Disappearance Strains US Ties
A line at a gas station in Maryland in June 1979. Public domain photo via the Library of Congress.
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