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Indicative content

There were obvious negative effects – rising prices, shortages, consumer issues and issues to do with US industrial production. However, there were also some positives which could be discussed even if the effects were not long lasting. In the immediate period after the embargo was announced, the price of oil rose from $3 per barrel to $12. This had a major impact because of the reliance of the US economy for decades on fossil fuel. Internal trade and travel depended on cheap and abundant fuel. The US faced price rises and fuel shortages, causing inflationary pressures and putting the day-to-day operation of the economy at risk. The authorities called for measures to conserve energy, asking gas stations to close on Sundays and homeowners to reduce energy usage. In addition to causing major problems in the lives of consumers, the energy crisis was a huge blow to the American motor manufacturing industry, which had for decades made increasingly large and inefficient cars which would now be challenged by Japanese manufacturers producing smaller and more fuel-efficient models.

Usually seen as negative, the crisis also had a more positive effect economically. Efforts were made to develop oil production in the US. There were also moves to reduce dependence on fossil fuels and find alternative sources of power, including renewable energy sources such as solar or wind power, as well as nuclear power. However, these were not developed much in the long term because after oil prices collapsed in the mid-1980s and prices dropped to more moderate levels, domestic oil production fell once more, while progress toward energy efficiency slowed and foreign imports increased.

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2023 - M/J - 9489/42 | Q2

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