The oil crisis of 1973 was the first time the United States had ever faced an extreme fuel shortage. The cause of this shortage was an embargo placed on the US, and many western countries, by OAPEC (Organization of Arab Petroleum Exporting Countries). The embargo was set in place after the US supported Israel, which engaged with USSR-backed Syria and Egypt in the Yom Kippur war. The embargo choked US oil imports, which drove the price of a barrel of oil from $3 up to $12. This marked the beginning of a considerable gasoline price increase in the US. The severity of the gasoline shortage varied on your geographic location in the US. Still, it was felt by all and had a lasting impact on society.
As the price of gasoline rose, car manufacturers were pressured to make smaller and more fuel-efficient cars. Gas stations facing gasoline shortages had to implement limits on how much gasoline each customer was allowed to purchase. Some of the typical limits were 5 or 10 gallons per car. Widespread fear put further pressure on the already short gasoline supply. Much like bank runs in the 1930 or the mass purchasing of toilet paper at the onset of the Covid-19 pandemic, consumers frantically buying up the gasoline supply caused the fuel shortage to worsen. The government soon began to intervene with policies only allowing US citizens to fill their gas tanks on certain days. The days you were allowed to fill up were based on if your license plate had odd or even numbers. President Nixon’s most famous government policy was decreasing the national speed limit to 55 miles per hour. This law stayed in effect on some interstates on into 1995.
Fast forward almost 50 years to 2022, and bad actors still use energy resources as a weapon. We have seen OPEC in recent times attempt to bankrupt the US oil companies by increasing production, which resulted in the price of oil plummeting from 2014 to 2016. During the current US oil supply issues, OPEC recently declared they will be cutting their production by two million barrels by the end of 2022. Russia, an OPEC+ member, is using Europe’s reliance on Russian natural gas as a weapon in the Russian-Ukraine conflict.
The West must learn from history and endeavor to break its detrimental reliance on these countries for its energy needs. Plans should be put into place to achieve the highest level of energy independence possible. Government should seek to accomplish this through some mix of wind, solar, natural gas, nuclear, oil, or coal. Countries must take advantage of these many forms of energy to create a robust, reliable, and efficient energy portfolio that will ensure their nation’s well-being.
Sources:
- https://www.billofrightsinstitute.org/essays/the-1973-oil-crisis-and-its-economic-consequences
- http://large.stanford.edu/courses/2018/ph240/davidson2/
- https://www.studysmarter.us/explanations/macroeconomics/macroeconomics-examples/oil-crisis-1973/
- https://www.macrotrends.net/1369/crude-oil-price-history-chart
- https://fox5sandiego.com/news/business/the-cost-of-gasoline-the-year-you-started-driving/