Between October and January world oil prices quadrupled. By putting an end to decades of cheap energy, the oil crisis, which was led by Arab members of the Organization of Petroleum Exporting Countries OPECexacerbated the economic difficulties facing many industrialized nations, forced developing countries to finance their energy imports through foreign borrowing, and generated large surpluses for oil-exporters.
See Article History Arab oil embargo, temporary cessation of oil shipments from the Middle East to the United States and the Netherlands, imposed by oil-producing Arab countries in in retaliation for U. The Arab oil embargo was the first oil-supply disruption to lead to major price increases and a worldwide energy crisis.
The embargo caused the United States and western European countries to reassess their dependence upon Middle Eastern oil. It also led to far-reaching changes in domestic energy policy, including increased domestic oil production in the United States and a greater emphasis on improving energy efficiency.
Egyptian and Syrian forces made early gains across the Suez Canal and Golan Heightsbut Israel quickly turned the tide, and within a few weeks Israeli troops had pushed forward into Egyptian and Syrian territory. In an attempt to pressure Western countries to force Israel to withdraw from seized lands, Arab members of OPEC Organization of the Petroleum Exporting Countries announced sharp production cuts and then banned the sale of oil to the United States and the Netherlands.
Until that time, OPEC, which was formed inhad kept a relatively low profile, mainly negotiating with international oil companies for better terms for member countries. Nixon to boost the sluggish American economy. For example, Nixon ordered the release of the dollar from the gold standardwhich had been in place since the end of World War II.
The resulting devaluation of the currency led to financial losses on the part of oil-producing countries, whose revenues consisted largely of U. Enormous increases in Western oil consumption—more than doubling over approximately the preceding 25 years—also contributed to the severity of the crisis, as people in the developed world had become accustomed to cheap gasoline and relatively stable prices.
After the imposition of the embargo, the price of a barrel of oil quadrupled by As a result, the United States experienced its first fuel shortage and first significant increase in gasoline prices since World War II.
In response to the embargo, the U. Nixon seriously considered military action to seize oil fields in Saudi ArabiaKuwaitand Abu Dhabi as a last resort. However, negotiations in Washington, D. Learn More in these related Britannica articles:Roy Licklider, "The Power of Oil: The Arab Oil Weapon and the Netherlands, the United Kingdom, Canada, Japan, and the United States," International Studies Quarterly 32 (): Karen R.
Merrill, The Oil Crisis of A Brief History with Documents (Bedford St. Martin’s, ). The situation was further complicated by expansionary fiscal policy implemented by President Nixon that predated the embargo, which resulted in inflation.
Forty years later, only 40% of American. Oct 16, · On Dec. 23, , cars formed a double line at a gas station in New York City.
The Arab oil embargo caused gas shortages nationwide and shaped U.S. foreign policy to this day. Oil Embargo, – During the Arab-Israeli War, Arab members of the Organization of Petroleum Exporting Countries (OPEC) imposed an embargo against the United States in retaliation for the U.S.
decision to re-supply the Israeli military and to gain leverage in the post-war peace negotiations. Jun 09, · NBC Nightly News coverage of OPEC's decision to cut exports of oil to the United States along with other nations.
Reported by John Chancellor on the evening of October, 17 The OPEC oil embargo was a decision to stop exporting oil to the United States.
On October 19, , the 12 OPEC members agreed to the embargo. Over the next six months, oil prices quadrupled. Prices remained at higher levels even after the embargo ended in March The plummeting value of the.