Impact of the OPEC Oil Embargo on the U.S
Oil production and distribution industry has for many decades been faced by many challenges. There have been notable negative and positive impacts of the oil industry in the globe. Worth mentioning is the October 1973 event when Arab oil producers declared an embargo that limited the merchandise and distribution of oil to the United States. The ban was enforced by the members of a alliance known as the Organization of Petroleum Exporting Countries [OPEC] and it had great impact on the US.
During the 1973 Arab-Israel War, Arab members of the OPEC imposed a ban that hindered the United States from enjoying any petroleum exports as well as any other country that supported Israel and the war. The OPEC members included Iraq, Saudi Arabia, Iran, Venezuela and Kuwait [the founding members]. Nine more governments joined the union later and they are Qatar, Libya, Indonesia, Nigeria, Algeria, Angola, Gabon, United Arab Emirates and Ecuador.
The OPEC oil embargo was against United States decision to re-supply Israel military with enough oil and help them gain leverage in the post-war peace negotiation. The OPEC oil restriction did not only affect United States, but also Netherlands, South Africa and Portugal. The embargo banned not only petroleum products export to the core targeted nations, but also introduced unbearable cost in oil production.
Oil-producing nations and oil companies were already weakened by the decades of oil-pricing systems which also worsened the oil restriction effects. Hence, the effects of the 1973 oil embargo intensely affected the United States economy which has been depended on foreign oil. The embargo brought on challenges of unequaled proportions in the entire nation. The daily delivery of oil from the Middle East deteriorated from 1.2 million barrels to a scarce of 1900 barrels. The vast number of motor vehicles owners faced a lot of difficulties accessing oils and were forced to pay exceedingly for gasoline and other related products. By 1973 and 1974, every motor vehicle owner was complaining as the gasoline prices increased by 43 percent.
United States citizens could not hold on anymore and many panicked and feared for the worst to come. The OPEC cartels were not ready to cut things loose and the nation suffered and the world was ready to agree with what the OPEC members had in store. Besides the rising oil prices, inflation made every resource in the nation scant. Due to high consumption of oil and related products in the US, the government had to come up with great ways to overcome this knee-crumpling situation.
The embargo prompted exceptional consumption efforts throughout the nation. Consumers were spurred to use oil responsibly and try as possible to save more money for future use. Moreover, traffic-related deaths reduced in the US roads as a speed limit of 55 miles per hour was declared by President Jimmy Carter. The OPEC exercised immense amount of power but it lasted until 1974 and its oil-domination consequences were also severe. The demand for oil also reduced as the US and affected nations stop spending on their oil and opted for other means; more so on domestic supply. Alternatively, energy sources such as nuclear energy, coal and natural gas were adopted and sounded more economic and effective than the high-prices OPEC oil.
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Online sources:
http://www.answers.com/topic/opec-oil-crisis
http://csis.org/publication/arab-oil-embargo-40-years-later
http://en.wikipedia.org/wiki/OPEC