Escalating Oil Prices And The Global Economy

12 Pages 3006 Words

moved during the Arab Oil Embargo. During the oil embargo, OPEC boosted prices from $2.90 per barrel before the embargo to $11.65 by Christmas. Prices in other markets were even worse; some Iranian oil went for $17 per barrel (Sheets, 1998). The extreme sensitivity of prices to supply shortages became all too apparent. Prices increased 400% in six short months (Williams, 1999). Even though the OPEC induced embargo lasted only six months; it triggered worldwide energy shortages that lasted eight years, a global recession, and permanent changes in the oil market and U.S. economy.
In 1973, the President of the United States, Richard Nixon, tried to bring peace between the Arab states and Israel. His attention could have been more helpful if it was not overshadowed by the scandals of Watergate. The nation at this time was dependant upon foreign oil to keep its transportation systems and factories working (Sheets, 1998). In 1977 President Jimmy Carter appeared on national television and declared “the moral equivalent of war” on the nation’s ...