Opec's latest move big shock for global system

IN the 1970s, the oil-producing and exporting countries of the Middle East delivered a shock to the global economic system that had many unexpected consequences. The quadrupling of the price of oil hastened the process that came to be called "globalisation". It deeply affected the structure of the global economy and also produced a number of political consequences.

The oil-importing developing countries were the most affected group of nations. Some of those who could borrow from the world's capital markets did so to pay their oil import bills. This created indebtedness and moved some of the countries which had borrowed massively towards default on their external obligations. Many of them turned to the International Monetary Fund for help.

On Nov 27, 2014, the Organization of the Petroleum Exporting Countries (Opec) delivered another shock to the global system, but of a kind very different from the one 40 years earlier. Its consequences will be equally far-reaching.