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This text concerns the three economic questions: what, how and for whom to produce.
The text starts saying that oil is an important commodity in modern economy. Economic activity was organized on the assumption of cheap and abundant oil. Bit OPEC correctly anticipated that a price increase would lead to only small reduction in sales. And it would very profitable for OPEC members.
The dramatic price increases of 1973-74 and 1978-80 have become known as the OPCE oil price shoks, becouse they took the world by surprise and also becouse economy had been organized on the assumption of cheap oil prices. People respond to prices, and responses are pert of the process by which societies determine what, how and for whom to produce.
First: how the conomy produces goods. In general, higher oil prices make the economy produce in a way that uses less oil.
Second: what to produce. What is being produced reflects a shift away from expensive oil-using products towards less oil - intensive substitutes.
Third: for whom. Oil-importing nations had to give up more of their own production in exchange for the oil imports that they required.
In conclusion, the economy in an interconnected system and a disturbance anywhere ripples throught the entire economy