1973 Oil Crisis

1973 Oil Embargo

As a country, it’s a pretty scary thing when your petroleum supply gets cut off. Within days, shortages of gasoline, diesel fuel, home heating oil and aviation fuel start to appear. To state that life is altered is a bit of an understatement. Scared to death might be a better representation. And this did happen in the United States.  It was during the Oil Embargo of 1973, and it was scary.

Background to the Embargo

In 1948, the Allied powers from WWII had sectioned off a section of the British-controlled territory of Palestine to create the state of Israel. Finally, disenfranchised Jews from all around the world had a place to call home. However, much of the local Arab population refused to acknowledge the new Israeli state. The result was constant conflicts over land ownership. In 1973, tensions boiled over and Egypt and Syria came to the aid of the Palestinians.  During the conflict, the Soviet Union began sending arms to Egypt and Syria, and the United States started to send arms to Israel. Arabs around the world were furious.

The Embargo

In response to the actions of America, the Arab members of the OPEC proclaimed an embargo on all oil being shipped to the United States and the Netherlands, the main supporters of Israel. Though the conflict ended in late October, 1973, the embargo continued, sparking an international energy crisis.

Energy Crisis

In the three months after the embargo was announced, the price of oil quadrupled. State and national leaders called for measures to conserve energy, such as asking gas stations to close every other day and homeowners to turn down their thermostats. The folks at Stones Jeep of ID, a local Chrysler, Dodge, Jeep, Ram dealer in Rexburg, ID, says they remember it well. One of the first things that Richard Nixon did was lower the national maximum speed limit to 55mph (it used to be 70mph).

The Car Business

The energy crisis hit the American automotive industry hard. For decades, Detroit had turned out bigger and bigger cars, and with cheap energy available, it seemed a permanent trend. The embargo lead directly to the immediate desire to drive smaller, more frugal vehicles. Thus began the small car revolution whereby little, fuel efficient sedans from and Japan and other countries drew immediate interest for American car buyers.

Immediate Impact

The oil embargo was lifted in March 1974, but oil prices remained high, and the effects of the energy crisis lingered throughout the decade. Environmentalism reached new heights during the crisis, and became a driving force behind federal policymaking. As part of the movement toward energy reform, efforts were made to stimulate domestic oil production as well as to reduce American dependence on petroleum and find renewable energy sources such as solar or wind power, as well as nuclear power.


Oil remained at high prices until the mid-1980s when abundant supplies cause the market to collapse. This caused gas prices to drop to more moderate levels and domestic oil production fell once again. Unfortunately progress towards energy efficiency slowed down and our dependence on foreign oil imports increased.