History Timeline 1970's

Photo above: President Richard Nixon. Courtesy National Archives. Right: Statue of Secretariat at Belmont Park, 2014, courtesy Wikipedia Commons.


U.S. Timeline - The 1970s

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  • Timeline

  • 1973 - Detail

    October 19, 1973 - The Arab Oil Embargo: Oil imports from Arab oil-producing nations are banned to the United States after the start of the Arab-Israeli war, creating the 1973 energy crisis. They would not resume until March 18, 1974.

    Gas Ration Stamps

    In the matter of hindsight in history, but using today as context, it's hard to believe that the Arab Oil Embargo of 1973-4, in response to the Arab Israeli Yom Kippur War was not the United States refusing to buy oil from the aggressors, but in actuality, it was OPEC, the Arab Oil Producing countries that placed the embargo, ban on sale, of oil to friends and supporters of Israel. We were not alone. They embargoed Canada, the United Kingdom (no supply interruption with embargo due to other political factors), Japan, the Netherlands, Rhodesia, South Africa, and Portugal. The price increased to four times its former level, from $3 per barrel to $12 per barrel. Gas lines became commonplace in the United States.

    How did we get there? Actually, it was pretty simple. Yes, there had been monetary changes in the previous years, i.e. changing from the Gold Standard, and the pulling out of the Bretton Wood Accord (won't get into that here). There was also the fact that the United States had become increasingly dependent on foreign oil, from 1945 when the United States produced 2/3 of all the world's oil to 1973, when it only produced 16.5%. We were importing 5.6 million barrels per day by that point (some estimates state 6.2 million barrels per day).

    The problems came to a crux when the Yom Kippur War began on October 6, 1973. And while it made the above factors less significant for the reason why an embargo would be placed on those nations, it made the impact more dire.

    Embargo Decision

    With Egypt attacking the Bar Lev line in the Sinai Peninsula and Syria attacking the Golan Heights in the start of the war's offensive on October 6, the United States responded by sending weapons and supplies to Israel (Operation Nickel Grass). It was attempting to counteract the Soviet Union, which was supplying Egypt and Syria with the same. On October 16-17, OPEC (Saudi Arabia, Iran, Iraq, Abu Dhabi, Kuwait, and Quatar) cut production by five percent, attempting to use the dependence on their oil as a weapon. The United States stepped up its support of their ally with $2.2 billion in aid on October 19. OPEC responded with the embargo, with other nations joining the effort within one day.

    Although most of the fighting in the Yom Kippur War would only last until October 26, 1973, the embargo and its impact on the United States produced gas lines and rising consumer costs for heating oil and gasoline. Oil companies and the oil producing nations made large profits. That created a dilemma on who was actually the cause for the shortages and rising prices. It was estimated at the start of the embargo that OPEC only accounted for six percent of United States supply. There were a variety of reports that the percentage was actually higher when considering refineries outside the United States; all said, between 1 million and 3 million barrels a day were in jeopardy. It was later stated that the amount was 1.2 million barrels a day from Arab nations of the 5.6 million barrels per day that the United States imported. Those numbers, plus oil used in other products, would have accounted for 10% of the needed petroleum supplies in total.

    President Nixon urged gas stations to stop sales of gas on Saturday nights and Sundays; ninety percent complied. AAA reported that twenty percent of all stations had no gas in the last week of February 1974. There were rules that only odd numbered license plates could buy gas on odd numbered days; even on even days.

    After Israel agreed to pull its troops from the west side of the Suez Canal on January 18, 1974, but not the remainder of the territory that the Arab nations desired, pressure to end the embargo rose. After the troops withdrew on March 5, twelve days later, March 17, the embargo was lifted by all nations except Libya.

    What Happened After the Embargo?

    Secretary of State Kissinger diffused the tension in the region with diplomacy (majority of conflict ended on the Syria front on May 31) and the Arab Israeli conflict ended without Israel giving back the territory in the Sinai and Golan Heights secured during the 1967 conflict that Egypt and Syria demanded. Home heating oil and gasoline were now available again in the United States, but at markups of 55% and 30% respectively. In May 1973, the price of gas had been 38.5 cents per gallon; in June 1974 it was 55.1 cents per gallon. And while the Arab nations may not have gotten their political desires, they had taken control of the oil market and increased their wealth dramatically.

    Photo above: Gas ration stamps being inspected at the Bureau of Engraving, 1974, Warren K. Leffler. Courtesy Library of Congress via Wikipedia Commons. These stamps were never used. Below: Closed Gas Station in Shelton, Washington, April 1974, David Falconer. Courtesy National Archives. Source info: "A Political Evaluation of the Arab Oil Embargo," May 1974, Merip Reports; Wikipedia Commons.

    Closed Gas Station 1973 Oil Embargo

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