Articles from News and Courier and Exxon Ad from The State about OPEC Crisis, October 1973
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In October of 1973 Egypt and Syria launched an attack on Israel, both countries seeking to reclaim the land that Israel had taken upon their victory in the Six Day War of 1967. The conflict came to be known as the Yom Kippur War. Though surprised by the advance, the Israeli army was quick to rally, and turned the tide of aggression in less than a month. United States Secretary of State Henry Kissinger stepped in just short of Israeli victory to broker a peace between the warring nations: The US was a strong supporter of Israel in 1967 and Kissinger hoped to shift American policy to a more neutral stance.
Despite Kissinger’s diplomatic efforts, the Arab members of the Organization of Petroleum Exporting Countries (OPEC) used their natural resources to exert pressure on the United States; they hit Americans where it hurt the most, their wallets. In late October OPEC announced that it would cut oil production by 5 percent each month until Israel agreed to return the property seized in 1967. When President Nixon announced an aid package for Israel two days later, Saudi Arabia cut off all oil shipments to the United States and other European countries that were supporters of American foreign policy. Ultimately, the oil embargo cut the world’s supply by 10 percent and led to devastating consequences for the US economy.
Americans experienced high prices and shortages at the pump, contributing to a widespread panic for the millions who had grown completely dependent on their automobiles. The hike in gas prices also contributed to a drastic rise in the cost of utilities. Americans were forced to spend more money on their journeys to work and the heating of their homes, and as a result spent less and less on retail items. Unemployment rose to the highest national levels since those experienced during the Great Depression, and the auto industry was forced to lay off more than 225,000 workers.
In March of 1974, Kissinger was able to negotiate an Israeli pullback on the Sinai Peninsula, and the oil embargo ended. Gasoline became abundant in the United States, but the energy crisis brought to light an important fact: Americans were totally dependent on a natural resource that could not be found in America. The United States would be forever reliant on other countries to fulfill its gas needs, and thus the well being of its citizens and economy. The sprawling suburban lifestyle that characterized the new American dream proved to be a growing liability. A subsequent gas crisis in 1979, initiated by the overthrow of the Shah of Iran, had even more severe impacts than those experienced in ’73. Still, Americans continued exhaustive energy consumption.
The Exxon Company published this advertisement from The State newspaper a week after the start of the embargo. In the ad, Exxon shows its close involvement with the US government and efforts to meet the country’s demand for oil. Although gas prices would go down again in the early 1980s and late 1990s, the economic implications of political actions against oil producing countries became a major international concern in the First Gulf War, and again after the events of September 11, 2001.
"Will There Be Enough Heating Oil to Keep Us Warm This Winter?" The State, 23 October 1973, 5A. Newspapers on Microfilm. Published Materials Division, South Caroliniana Library, University of South Carolina, Columbia, South Carolina.
“Arabs Blackmail USA.” News & Courier, 19 October 1973, 10A. Newspapers on Microfilm. Published Materials Division, South Caroliniana Library, University of South Carolina, Columbia, South Carolina.
Standard 5-5: The student will demonstrate an understanding of the social, economic, and political events that influenced the United States during the Cold War era.
Indicator 5-5.5 Explain the political alliances and policies that impacted the United States in the latter part of the twentieth century, including the North Atlantic Treaty Organization (NATO), the United Nations, and the Organization of Petroleum Exporting Countries (OPEC).
Standard 7-7: The student will demonstrate an understanding of the significant political, economic, geographic, scientific, technological, and cultural changes and advancements that took place throughout the world from the beginning of the twentieth century to the present day.
Indicator 7-7.6 Explain the impact of increasing global economic interdependence in the late twentieth century and the early twenty-first century, including the significance of global communication, labor demands, and migration; the European Economic Community (EEC) and other trade agreements; and the oil crisis of the 1970s.
Standard USHC-9: The student will demonstrate an understanding of the social, economic, and political events that impacted the United States during the Cold War era.
Indicator USHC-9.4 Compare the domestic and foreign policies of the period—including Kennedy’s New Frontier, Johnson’s Great Society, and Nixon’s establishment of environmental protection and rapprochement with China—as well as relations with the Soviet Union and the continuing crises in the Middle East under all administrations from Harry Truman to Jimmy Carter.