On October 17, 1973, the Organization of Arab Petroleum Exporting Countries (opec) declared an embargo on the shipment of oil to those countries that had supported Israel in its conflict with Egypt. With one stroke, the total dependence of the industrialized world on oil, much of which happened to reside beneath the sands of the Arab countries, became painfully clear.
Before the embargo, the industrialized West, especially the United States, had taken cheap and plentiful petroleum for granted. Oil consumption in the United States had more than doubled between 1950 and 1974. With approximately 6 percent of the world's population, the nation was consuming 33 percent of the world's energy.
The effects of the embargo were immediate. The retail price of a gallon of gasoline rose from a national average of 38.5 cents in May 1973 to 55.1 cents in June 1974. With the onset of the embargo, U.S. imports of oil from the Arab countries dropped from 1.2 million barrels a day to a mere 19,000 barrels. Daily consumption dropped by 6.1 percent from September to February, and by the summer of 1974, by 7 percent.
The U.S. government response to the embargo was quick, but of limited effectiveness. A national speed limit of 55 miles per hour was imposed to help reduce consumption. (This, incidentally, caused traffic fatalities to drop by 23 percent between 1973 and 1974.) President Richard M. Nixon named William Simon as an official "energy czar," and in 1977 a cabinet-level Department of Energy was created.
Some long-term effects of the embargo are still being felt. Public suspicion of the oil companies, who were thought to be profiteering or even working in collusion with opec, continues unabated (seven of the fifteen top Fortune 500 companies in 1974 were oil companies, with total assets of over $100 billion). But the initial moves toward more efficient automobiles and alternate sources of energy ended as oil prices fell and memory of gasoline lines faded. Ultimately, little of substance changed. Americans continue to use energy in amounts far out of proportion to their numbers, automakers continue to oppose legislation that would force them to increase the efficiency of cars, and the United States continues to respond to any threat to the supply of oil as a threat to national security.
See also Middle East-U.S. Relations; Oil Industry.
