This paper analyzes the 'textbook claim' that oil shocks are supply shocks. In order to be qualified as adverse supply shocks, oil shocks should trigger decreases in equilibrium quantities and increases in prices of various commodities. The analysis presented in this paper reveals that oil shocks indeed qualify as supply shocks. Oil shocks immediately depress real industrial production and at the same time immediately push up the producer price index. The impulse responses of industrial production and producer price are highly statistically significant. Contrary to most empirical results obtained using quarterly data, the oil shock dates do not generate significant impulse responses of neither the real industrial production nor the producer price index. The finding suggests that the actual oil price movements, instead of the shock component of oil price hikes, are important in explaining the decrease in outputs and the increase in the price level.