A supply shock is an unexpected event that suddenly changes the supply of a product, commodity or service, resulting in an unanticipated change in prices. Supply shocks can be either negative, resulting in reduced supply and higher prices, or positive, resulting in increased supply and lower prices.

Negative supply shocks, such as the rise in oil prices during the 1973 oil crisis, can lead to inflation and even stagflation due to the combination of higher prices and falling production.

A recent example of a negative supply shock is the disruption of energy and commodity markets following the Russian invasion of Ukraine in 2022, which was exacerbated by economic sanctions.