October 17, 1973 – The start of the 1973 oil crisis

The oil crisis of 1973 began on this day when the members of the Organization of Arab Petroleum Exporting Countries (OAPEC) proclaimed an oil embargo in order to try and influence the West’s support of Israel. By the end of the embargo the price of oil had risen from $3 USD per barrel to nearly $12 globally; US prices were significantly higher. The embargo was in direct response to American involvement with what is known as the Yom Kippur War, which took place in 1973 when Egyptian and Syrian forces conducted a surprise attack against Israel. In response, the United States supplied Israel with arms. The embargo, which in short is basically a prohibition of trade set forth by one party against another, was placed by the OAPEC against Canada, the Netherlands, Japan, the UK and the USA. Following the embargo the Nixon administration began to negotiate terms to an end of the embargo, which included Israel pulling out of key locations including Golan Heights and the Sinai Peninsula. The embargo finally came to an end in March 1974 but it had successfully demonstrated Saudi Arabia’s economic and diplomatic power in the world. The 1973 oil crisis, often referred to as the 1973 “oil price shock,” was followed by a stock market crash. Together, these conditions are generally perceived as the first persistent event to have a major negative effect on the US economy since the great depression. PicsGraph of oil prices from 1861–2015, showing a sharp increase in 1973 and again during the 1979 energy crisis. The orange line is adjusted for inflation. – By TomTheHand – Own work, CC BY-SA 3.0,A man at a service station reads about the gasoline rationing system in an afternoon newspaper; a sign in the background states that no gasoline is available. 1974 – public domain