wsj this link has a paywall.You can bypass by copying the link into google). "In late 1985, Saudi Arabia abandoned its swing-producer role, increased production, and aggressively moved to increase market share" (freerepublic). The sudden oil flood caused the oil price to collapse from $30 to $10 (minus 70% morganstanley). After the 1986`s oil crash followed a period of relatively cheap oil and other commodities till around 2003 (charts below).
The oil price collapse didn´t cause a recession. The US economy grew in the years 1986 & 1987 each 3.5% (annual GDP growth) and accelerated to 4.2% in 1988 (worldbank). In the period 1985 through 2000 cheap
commodities in combination with falling interest rates and a
technological revolution (Internet) induced a period of prosperity
(with the exception of 1992 as the first Iraq war caused an oil price
spike which caused a mild and short-lived recession), the longest
boom in U.S. history (factcheck).
Below you can see a graph which shows the growth of the US GDP and a table which depicts the advance of the US per capita income (econwiki indexmundi). Both show that the US GDP and per capita income doubled from 1985 through the year 2000.
It is remarkable that the US unemployment rate followed the downward trend of the oil prices in the 1980s:
The 1986 oil price collapse worked like a global tax cut. Consumers world
wide had more money to spend for other goods & services.
Dropping energy prices translated into lower transport costs - thanks to
cheaper Diesel - which lead to lower prices for food and other goods.
Cheaper energy also reduced the costs to produce steel, cement and many
intense goods. Many things which are made from oil, like cleaning
fluids, laundry detergents, paint, pharmaceuticals, cosmetics, hygiene
products, diapers & plastics, also got cheaper. So, cheap oil
translated into low inflation which allowed falling interest rates.
The situation today is very similar to the situation 1986. In both cases the oil flood is caused not by imploding demand but by aggressive pumping of the producers. I think that the current oil price collapse will lead to another period of cheap oil (driveby) which will inspire another period of prosperity.