The 1970s Energy Crisis was a period in which the major industrial nations of the world, particularly the United States, faced substantial shortages, both perceived and real, of petroleum. The two worst crises of this period were the 1973 oil crisis, caused by the Arab Oil Embargo of OAPEC, and the 1979 energy crisis, caused by the Iranian Revolution.
The crisis period, however, was triggered by events at the end of the 1960s. It was during this time that petroleum production in the United States and some other parts of the world peaked. Subsequently during the 1970s world oil production per capita peaked.
The major industrial centers of the world were forced to contend with escalating issues related to petroleum supply. The fact that Western nations had to deal with potentially unfriendly sources in the Middle East and other parts of the world to maintain supply made the situation especially complex.
The crisis led to stagnant economic growth in some nations, particularly the U.S., as oil prices climbed. Though there were genuine issues with supply, part of the run-up in prices resulted from the perception of a crisis. The combination of stagnant growth and price inflation during this era led to the coinage of the term stagflation.
By the 1980s both the recessions of the 1970s and adjustments in local economies to become more efficient in petroleum usage had controlled demand sufficiently that petroleum prices worldwide began to return to more sustainable levels.
The period was not uniformly negative for all economies. Petroleum-rich nations in the Middle East benefitted tremendously from increased prices and the slowing production in other areas of the world. Some other nations, such as Norway, Mexico, and Venezuela, benefitted as well. In the United States, the states of Texas and Alaska, as well as some other oil-producing areas, experienced major economic booms due to soaring oil prices even as most of the rest of the nation struggled with the stagnant economy. Many of these economic gains, however, came to a halt as prices stabilized and dropped in the 1980s.
The crisis period, however, was triggered by events at the end of the 1960s. It was during this time that petroleum production in the United States and some other parts of the world peaked. Subsequently during the 1970s world oil production per capita peaked.
The major industrial centers of the world were forced to contend with escalating issues related to petroleum supply. The fact that Western nations had to deal with potentially unfriendly sources in the Middle East and other parts of the world to maintain supply made the situation especially complex.
The crisis led to stagnant economic growth in some nations, particularly the U.S., as oil prices climbed. Though there were genuine issues with supply, part of the run-up in prices resulted from the perception of a crisis. The combination of stagnant growth and price inflation during this era led to the coinage of the term stagflation.
By the 1980s both the recessions of the 1970s and adjustments in local economies to become more efficient in petroleum usage had controlled demand sufficiently that petroleum prices worldwide began to return to more sustainable levels.
The period was not uniformly negative for all economies. Petroleum-rich nations in the Middle East benefitted tremendously from increased prices and the slowing production in other areas of the world. Some other nations, such as Norway, Mexico, and Venezuela, benefitted as well. In the United States, the states of Texas and Alaska, as well as some other oil-producing areas, experienced major economic booms due to soaring oil prices even as most of the rest of the nation struggled with the stagnant economy. Many of these economic gains, however, came to a halt as prices stabilized and dropped in the 1980s.
