17.10.

1973: Beginning of the Arab Oil Embargo

1973: Beginning of the Arab Oil Embargo

Story Highlights

  • historical event:
  • The embargo caused oil rationing across the world. However, the oil shock also prompted developed countries to start thinking about seeking alternative sources of energy.

On this day, the OAPEC (Organization of Arab Petroleum Exporting Countries) initiated an oil embargo, as a response to American assistance to Israel during the Arab-Israeli conflict.

As a consequence of this embargo, oil prices on the world market quadrupled. Of course, this had a great effect on the economy of industrialized countries. Oil rationing was introduced across the world. However, the oil shock also prompted developed countries to start thinking about seeking alternative sources of energy.

Similar manipulation of the volume of exports, as well as the price of oil, may well also happen in the future. Even worse, oil reserves are projected to decline in the future, while energy demand is constantly on the rise.

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