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When the supply of oil is reduced as happens with an oil embargo without a fall in demand, up goes the price to maximise gain from what has then become a scarce resource. In reality, the oil is still there in the ground and profit will be made when it is extracted but such is the way of economics. Also known as making hay whilst the sun shines!
Incidentally, when there is an oversupply or glut in the market, the price should fall but what tends to happen is that the oil producers cut back on production until the price rises so the consumer rarely wins.
Ray Dawson
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∙ 12y ago
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How did the oil embargo affect the United StatesIn 1973 Arab oil-producing countries enacted an oil embargo and refused to sell oil to the US?
Oil prices in the U.S. increased, and there was high inflation
How did the organization of petroleum exporting countries OPEC oil embargo of 1973 most affect individuals in the us?
It raised gasoline prices.
How did the Organization of Petroleum Exporting Countries (OPEC) oil embargo of 1973 most affect individuals in the US?
It raised gasoline prices.
How did the oil embargo affect the US?
Oil embargo affected the US in a few ways. The main way the US was affected by OPEC.
What were the effects of the Arab OPEC oil embargo on the US?
what were the effects of the Arab OPEC oil embargo on the U.S
How did the embargo by the organization of petroleum exporting countries cause stagflation?
Oil prices increased
What were the effects of the 1973 oil embargo?
Effects of the 1973 oil embargo include stagnation in oil importers and high inflation. There were also many negotiations over taxes, shares and prices between governments.
What caused energy prices to rise during Carter's presidency?
An oil embargo against the United States
How did the Organization of Petroleum Exporting countries embargo contribute to stagflation problem in 1970s?
oil prices increased
How did the opec embargo contribute to stagflation problems in the early 1970s?
The OPEC embargo of 1973 led to a sharp increase in oil prices, which raised production costs for businesses and resulted in higher prices for consumers. This triggered inflation as prices across the economy rose. At the same time, the decrease in oil supply caused by the embargo led to a slowdown in economic growth, contributing to the high inflation and high unemployment characteristic of stagflation.
Stagflation in the 1970s is most associated with?
The oil embargo
How did the embargo by the Organization of Petroleum Exporting Countries contribute to stagflation problems in the early 1970s?
oil prices increased
