Oil crisis, 1973
Episode #6 of the course “World’s biggest financial crises”
One major financial crisis in the United States was tied to oil. In 1973, Arab oil producers cut off exports to the United States to show their disapproval of American support to Israel in its war against Egypt and Syria. This situation brought widespread panic as gas prices soared. This crisis had far-reaching effects, however, particularly in America’s involvement overseas. The crisis showed just how dependent America was on foreign oil, which has prompted involvement in many conflicts in the Middle Eastern region.
The embargo caused more than just a gas crisis—it caused an energy crisis. The government asked Americans to cut down on energy consumption across the board, even discouraging families from putting up holiday lights for decorations. They also asked gas stations to close on Sundays, and many gas stations simply ran out of gas. The crisis also had a hugely negative impact on the American automotive industry. Their focus on bigger cars was not nearly as practical because of the increased concern about fuel consumption. Japanese manufacturers would outpace American-made cars for years to come because of their emphasis on smaller, more fuel-efficient vehicles.
The embargo also affected other countries like Great Britain, Switzerland, Norway, Denmark, and Germany, although the embargo was not uniformly enforced throughout Europe. These countries placed limitations on driving, flying, and boating. The British Prime Minister even asked citizens to only heat one room in their house over the winter in an effort to conserve energy.
The embargo was lifted in 1974, but its effects lasted long after that. The crisis made the United States realize how much energy they were consuming and encouraged the growth of environmentalism. Other changes like a national speed limit and using daylight savings time also became permanent changes.
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