Energy Crisis Of 1974 Research Paper

The Energy Crisis of 1974 During the end of 1973 through the beginning of 1975 Organization of Petroleum Exporting Countries (OPEC) slowed down oil production, and placed an embargo on the United States and the Netherlands. Before the crisis, OPEC was offering oil to the world at a decent price, however the end of the Arab-Israeli war changed that. After the war OPEC raised prices for Europeans, and even placed an embargo on oil being sent to the Netherlands and the United States. This embargo forced Americans to purchase European cars, which helped the economy of Europe. Eventually OPEC was forced to lower their prices and lift the embargo. During the 1974 Energy Crisis countries stopped relying on oil from OPEC, which stated the decline of OPEC’s power over the world economy.
OPEC was founded in 1960 and had controlled the world’s oil economy since.
In October of 1973, OPEC raised the posted oil price 70% because they had gotten so much power after the Arab-Israeli War (Organization of Petroleum Exporting Countries 1). During the war, the United States and the Netherlands aided Israel by giving them money, but the day after the money was given to Israel, OPEC placed the embargo banning oil from being sent to both of the countries (Arab-Israel War (1973) 2). In the years to come oil costs rose even more. Eventually oil became 400% above the price in September of 1973. This change caused chaos in the European economy (OPEC Oil Embargo 1). This economic change caused living costs to rise 10% making it hard for people to pay for essential
items.
Countries had to stop relying on OPEC during the energy crisis and find other sources of oil. In the Netherlands and the United States OPEC embargoed oil. This embargo caused for enormous lines and fights at gas stations. Many people had to wait days before they were allowed to wait in line for gasoline, but when they got a chance to there was no promise of there being enough for everyone. In other European countries gasoline was available, but it was very expensive. In certain European countries many people didn’t have enough money to pay these ridiculous prices. Because of these high prices, many countries tried to drill for their own oil to combat OPEC’s prices. Some Countries started to restrict speed limits, and recommended different temperatures for heat (Recession of 1970s 1). In the United States, the government imposed speed limits of 50mph. These limitations were put into effect for the people, even though many did not like them.
In In several countries including Norway, Great Britain, Russia, and Romania oil was discovered, allowing for these countries to no longer rely on OPEC's oil which lead to their fall in the world economy (Hyder 2). With all of these countries supplying their own oil they no longer need to pay ridiculous prices for oil from OPEC. Along with OPEC losing their business, they also were having some internal conflicts (Organization of Petroleum Exporting Countries 2). Kuwait was running their pumps faster than OPEC allowed. Iran threatened Kuwait with a military attack. With internal conflicts like this, other countries were easily able to end the crisis. OPEC was able to keep their company running till this day, but they still have many problems to sort out.