In 1973 the United States faced a crisis it was completely unprepared for. In response to US support for Israel in the Yom Kippur War, the OPEC nations placed an embargo on oil exports to the US. This chart displays the 1973 world oil crisis production metrics.
The 1973 oil crisis was partly to blame for a global recession. The crisis began when OPEC (Organization of the Petroleum Exporting Countries) decided to increase the price of their exports, while decreasing the amount of oil produced.
1973 World Oil Crisis Production Metrics
As the chart shows, at the time OPEC nations accounted for just over half of the global supply. OECD nations (essentially Europe, US, Japan, Korea, Australia, among others) accounted for about a quarter of production with the rest of the world producing the other quarter. This gave OPEC significant leverage in the global political spectrum. Oil could become “weaponized”.
The price increase of oil and reduced production had a significant impact on the US economy. In the years preceding the crisis US demand for oil began to outstrip its own supply of oil. Because of this, the US had to rely on imports of oil from other nations, like OPEC nations, to fill the gap. By relying on these foreign sources of oil to fill their needs, they were left susceptible should that supply be cut off.
This exact scenario occurred when the embargo was placed. Prices skyrocketed for existing oil due to lower oil supply. The US implemented rationing to try and curb demand which led to long lines at gas pumps. This was a major economic crisis, especially during the Cold War when any sign of weakness could be devastating.
The oil embargo on the US and reduced production eventually were lifted in 1974, but the effects of the crisis were long lasting. The US realized once again how important energy independence was to national security.
It led to a period in which oil discovery and innovation became national priorities. The crisis also aided the development of alternative energy sources so the country would not be as reliant on oil for energy needs. In some respects, the outcomes of the oil crisis are still being felt today.
Due to the rapid increase in oil prices, OPEC nations rapidly acquired wealth. The increase in wealth led to many of these nations, like Saudi Arabia, invest in science and technology. The resulting impacts on their society helped to increase public health and life expectancy drastically.