This paper identifies the main driving force behind oil price shocks in 1970-2006 by applying a simple identification strategy of supply-driven and demand-driven price shocks. The identification hypothesis states that supply-driven oil price shocks have a negative impact on the macroeconomic activity of countries, which are net consumers of oil while demand-driven oil price shocks do not have negative effects. In order to identify global demand-driven shocks, a weighted aggregate GDP series of countries, which are net consumers of oil, is constructed over 1970-2006. The key result is that the main driving force behind oil price shocks has changed from supply-driven shocks in 1970-1992 to demand-driven shocks in 1992-2006. (C) 2011 Elsevier Ltd. All rights reserved.