In October 1973, the Organization of Petroleum Exporting Countries (OPEC) decided unilaterally to end the oil corporations’ monopoly over crude oil prices and production levels, and immediately set a price considerably in excess of the prevailing norm. In the same month, a war broke out between Israel and the neighbouring Arab states: in order to support the Arab cause, a number of leading Arab oil producers announced a selective boycott of oil supplies, coupled with a progressive cut in production levels. In the aftermath of these two separate decisions, oil prices soared, the traditional role of companies within the international oil industry changed, and the incomes of the major oilexporting states increased severalfold. The petrodollar became an important element in the world economy, and Western companies competed for the contracts available for the rapid further development and modernization of the newly affluent oil states. Meanwhile, the vast rise in the price of oil caused further problems for the economies of the industrialized world, already suffering from inflation. Even when the real price of oil began to decline later in the 1970s, the power over pricing and production decisions still remained with the producer governments rather than the oil companies. In 1979 the Iranian Revolution triggered a worldwide panic about oil supplies that again pushed up prices severalfold and dealt a further blow to the developed economies.