The Energy Crisis of the 1970's
In October of 1973 the Organization of Petroleum Exporting Countries (OPEC) inflicted an oil embargo on the Unites States of America. This was the outcome of our support to the Israeli nation during a time of need. This embargo damaged the U.S. economy so greatly that many were unsure if the country would escape such devastation.
In the early 1970's under President Nixon's order, the United States of America began shipping arms to its ali Israel. At this time Israel was having problems fighting Egypt in the Yom Kippur War. Not long after the start of the war, OPEC announced that they would be inflicting an oil embargo on any country that was aiding Israel in the conflict. Among the few countries that were effected, the United States suffered greatly.
The impact of the embargo was drastic and had an immediate effect on the economy. In the United States, the retail price of a gallon of gasoline rose from a national average of 38.5 cents in May of 1973 to 55.1 cents in June of 1974. Meanwhile, The New York Stock Exchange shares lost $97 billion dollars in value in six weeks. With the onset of the embargo, U.S. imports of oil from the Arab countries dropped from 1.2 million barrels a day to a mere 19,000 barrels. Daily consumption dropped by 6.1 percent from September to February, and by the summer of 1974, by 7 percent as the United States suffered its first fuel shortage since World War Two. The U.S. government response to the embargo was quick, but of limited effectiveness. A national speed limit of 55 miles per hour was imposed to help reduce the consumption of oil. President Nixon named William Simon as an official "energy czar," and in 1977 a cabinet-level Department of Energy was created, which led to the creation of the United States' Strategic Petroleum Reserve. The National Energy Act of 1978 was also largely a response to this crisis. The crisis was further exacerbated by government price controls in the...
Please join StudyMode to read the full document