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    The oil crisis of the 1970s began when OPEC agreed to restrict oil production to raise prices in response to the 1973 Arab-Israeli war. This led to dramatically higher fuel prices in the U.S. and shortages. Gas prices rose almost four times to over $10 per barrel. High energy costs caused inflation and multiple recessions. The crisis highlighted America's dependence on foreign oil and the need to diversify energy sources.

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    Crisis of the 70`s

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    The oil crisis of the 1970s began when OPEC agreed to restrict oil production to raise prices in response to the 1973 Arab-Israeli war. This led to dramatically higher fuel prices in the U.S. and shortages. Gas prices rose almost four times to over $10 per barrel. High energy costs caused inflation and multiple recessions. The crisis highlighted America's dependence on foreign oil and the need to diversify energy sources.

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    7 views13 pages

    Crisis of The 70's

    Uploaded by

    aitap
    The oil crisis of the 1970s began when OPEC agreed to restrict oil production to raise prices in response to the 1973 Arab-Israeli war. This led to dramatically higher fuel prices in the U.S. and shortages. Gas prices rose almost four times to over $10 per barrel. High energy costs caused inflation and multiple recessions. The crisis highlighted America's dependence on foreign oil and the need to diversify energy sources.

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    of 13

    THE OIL CRISIS OF THE 70`S

    Carolina Caldern

    BACKGROUND
    USA depended increasingly on imported oil. The Middle Eastern countries had low oil price. In the early 1970s imported oil cost only $2.30 per barrel

    THE OIL CRISIS BEGINS


    The OPEC (Organization Of Petroleum Exporting Countries) agreed to restrain oil production

    in order to get higher prices.


    The 1973 Arab-Israel war (Egypt and Syria against Israel) OPEC levied an oil embargo against Israel's allies (USA)

    The oil embargo led to dramatically increased prices for all types of fuel. Gasoline shortage ensued. Automobiles were paralyzed.

    OPEC reassumed shipments at a price of $10.50 a barrel, almost four times the previous price. Through the 70s OPEC keep supplies tight to force price higher and higher. In the early 1980s a barrel of oil delivered to USA cost $36

    THE ECONOMIC EFFECTS


    Prices for virtually everything else rose in response to high energy costs, causing record inflation.

    As inflation and unemployment rose the country experienced several recessions.

    ADJUSTING TO HIGHER PRICES


    To increase production of crude oil To decrease production of crude oil To protest against another OPEC boycott

    RECOVERING
    Alaska pipeline was completed Significant discoveries in Mexico, Africa and the North Sea In the mid-1980 there was and oil glut.

    WHAT HAPPENS WHEN SUPPLY EXCEEDS DEMAND?


    In 1986, world oil prices crashed from the high $20s to $14 per barrel Another crisis: In 1999, oil prices fluctuated in the range from $10 to $20 per barrel. Due to inflation, were almost as low as they were in the early 1970s

    OPEC decided to cut production OPEC promised to increase production (long-term price range of $22-$28) The price has fluctuated between $20-$32 per barrel, into 2004

    VICTIMS OF USA SUCCESS


    Exploration becomes more costly The resulting drop in production devastated the economies of Texas and Louisiana Conservations efforts and incentives were abandoned

    OIL PRICE NOWADAYS


    Actual WTI oil price, Tuesday 19/07/2011: WTI $ 96.83 intraday high and intraday low of $ 96.28. Current price of Brent crude, Tuesday 07/19/2011: BRENT intraday high of $ 116.90 and intraday low of $ 116.30. Ecuadorian oil price USD 107.51

    SOURCES
    http://www.library.pitt.edu/labor_legacy/images/deindustria lizationBILL2.jpg
    http://www.afscme.org/images/ffch1.gif

    http://www.uaw.org/publications/jobs_pay/03/no1/pics/com pare01.gif
    http://www.pacpubserver.com/new/news/images/roebling mill.jpg

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