ID: Energy Crisis of 1973
When: October 1973 - 1974 (peaked in Winter 1973-74)
Who:
- OAPEC (Organization of Arab Petroleum Exporting Countries): Primarily Saudi Arabia, but also included other Arab nations.
- United States: Heavily reliant on foreign oil.
- Other Western Nations: Allies of the U.S. who supported Israel.
- President Richard Nixon: Faced with addressing the crisis.
What:
An oil embargo declared by OAPEC against the United States and other nations that supported Israel during the Yom Kippur War (October 1973). OAPEC significantly reduced oil production and halted exports to targeted nations. This led to severe oil shortages and soaring prices.
Impact: Why Significant?:
- Economic Recession: Contributed to a significant economic recession in the US, characterized by inflation and unemployment (stagflation).
- Gasoline Shortages: Long lines at gas stations, rationing, and increased fuel prices became commonplace.
- Energy Policy Changes: Forced the US to rethink its energy policy and dependence on foreign oil. Led to the creation of the Department of Energy (1977) and increased focus on energy conservation and alternative energy sources.
- Trans-Alaska Pipeline: Spurred the construction of the Trans-Alaska Pipeline to increase domestic oil production.
- Increased Inflation: Contributed significantly to inflationary pressures, exacerbating economic problems.
- Shift in Global Power Dynamics: Demonstrated the power of oil-producing nations and their ability to influence global politics and economies.
- Long-Term Conservation Efforts: Promoted smaller, more fuel-efficient cars (e.g., Japanese imports) and encouraged energy conservation in homes and businesses.