"On October 6, 1973, the Jewish holy day of Yom Kippur, Egyptian forces attacked Israel from across the Suez Canal, while at the same time Syrian troops were flooding the Golan Heights in a surprise offensive. After early losses, Israeli counterattacks quickly pushed into Syrian territory in the north, as troops outflanked the Egyptian army in the south. Israel, with help from the U.S., succeeded in reversing the Arab gains and a cease-fire was concluded in November. But on October 17, OPEC struck back against the West by imposing an oil embargo on the U.S., while increasing prices by 70% to America's Western European allies. Overnight, the price of a barrel of oil to these nations rose from $3 to $5.11. [In January 1974, they raised it further to $11.65.] The U.S. and the Netherlands, in particular, were singled out for their support of Israel in the war.
When OPEC announced the sharp price rise, the shock waves were immediate. Industrial democracies, accustomed to uninterrupted sources of cheap, imported oil, were suddenly at the mercy of a modern Arab nationalism, standing up to American oil companies that had once held their countries in a vise grip. Many of these "new" Arabs were Harvard educated and familiar with the ways of the West, and to many Americans it was impossible to understand how their standard of living was now being held hostage to obscure border clashes in strange parts of the world.
The embargo in the U.S. came at a time when 85% of American workers drove to their places of employment each day. Suddenly, President Nixon had to set the nation on a course of voluntary rationing. He called upon homeowners to turn down their thermostats and for companies to trim work hours. Gas stations were asked to hold their sales to a max of ten gallons per customer.
In the month of November 1973, Nixon proposed an extension of Daylight Savings Time and a total ban on the sale of gasoline on Sunday's. [Both were later approved by Congress.] But the biggest legislative initiative was the approval by Congress on November 13 of a Trans-Alaskan oil pipeline, designed to supply 2,000,000 barrels of oil a day. [This was completed in 1977. See any parallels to today's fight over the Arctic National Wildlife Refuge?]
A severe recession hit much of the Western world, including the U.S., and as gasoline lines snaked their way around city blocks and tempers flared (the price at the pump had risen from 30 cents a gallon to about $1.20 at the height of the crisis), conspiracy theories abounded. The rumor with the widest circulation had the whole crisis as being contrived by the major oil importers who were supposedly secretly raking in the profits. New York Harbor was really full of tankers loaded with oil, in no hurry to dock, according to the Oliver Stone types. Sorry, folks, it was just our own stupidity that allowed us to be so used and abused.
How did Wall Street respond? Well, as you might imagine shares in oil stocks performed well as profits soared, but the rest of the market swooned 15% between 10/17/73 and the end of November. [The Dow Jones fell from 962 to 822.] This ended up being the middle of the great bear market that would see the Dow go from its 1/11/73 high of 1051 to 577 by 12/6/74, a whopping 45% decline over nearly two years.
As for the embargo, the Arabs lifted it against the U.S. on March 18, 1974. The Dow then stood at 874."
So has our oil consumption increased or decresed since then?
stupidity is still around when it comes to a national energy policy.
History says its all about the "O"
When OPEC announced the sharp price rise, the shock waves were immediate. Industrial democracies, accustomed to uninterrupted sources of cheap, imported oil, were suddenly at the mercy of a modern Arab nationalism, standing up to American oil companies that had once held their countries in a vise grip. Many of these "new" Arabs were Harvard educated and familiar with the ways of the West, and to many Americans it was impossible to understand how their standard of living was now being held hostage to obscure border clashes in strange parts of the world.
The embargo in the U.S. came at a time when 85% of American workers drove to their places of employment each day. Suddenly, President Nixon had to set the nation on a course of voluntary rationing. He called upon homeowners to turn down their thermostats and for companies to trim work hours. Gas stations were asked to hold their sales to a max of ten gallons per customer.
In the month of November 1973, Nixon proposed an extension of Daylight Savings Time and a total ban on the sale of gasoline on Sunday's. [Both were later approved by Congress.] But the biggest legislative initiative was the approval by Congress on November 13 of a Trans-Alaskan oil pipeline, designed to supply 2,000,000 barrels of oil a day. [This was completed in 1977. See any parallels to today's fight over the Arctic National Wildlife Refuge?]
A severe recession hit much of the Western world, including the U.S., and as gasoline lines snaked their way around city blocks and tempers flared (the price at the pump had risen from 30 cents a gallon to about $1.20 at the height of the crisis), conspiracy theories abounded. The rumor with the widest circulation had the whole crisis as being contrived by the major oil importers who were supposedly secretly raking in the profits. New York Harbor was really full of tankers loaded with oil, in no hurry to dock, according to the Oliver Stone types. Sorry, folks, it was just our own stupidity that allowed us to be so used and abused.
How did Wall Street respond? Well, as you might imagine shares in oil stocks performed well as profits soared, but the rest of the market swooned 15% between 10/17/73 and the end of November. [The Dow Jones fell from 962 to 822.] This ended up being the middle of the great bear market that would see the Dow go from its 1/11/73 high of 1051 to 577 by 12/6/74, a whopping 45% decline over nearly two years.
As for the embargo, the Arabs lifted it against the U.S. on March 18, 1974. The Dow then stood at 874."
So has our oil consumption increased or decresed since then?
stupidity is still around when it comes to a national energy policy.
History says its all about the "O"
