OPEC Turned Oil Into a Weapon
On this day · 17 October 1973
In the middle of a war, Arab oil producers throttled the world's supply and quadrupled the price of crude almost overnight.
On 17 October 1973, with the Yom Kippur War raging, oil ministers from the Organization of Arab Petroleum Exporting Countries (OAPEC) agreed to cut production by 5 percent from the previous month, then keep cutting every month until Israel withdrew from territories occupied in 1967. Days later they imposed a full embargo on the United States for resupplying the Israeli military.
The shock rippled through the global economy. The price of crude leapt from roughly $2.90 a barrel before the embargo to about $11.65 by January 1974, a near-quadrupling that triggered gas lines, rationing, and stagflation across the industrialised world.
A single political decision showed how a handful of producers could hold the world’s economy hostage.
The embargo was lifted in March 1974, but the lesson stuck. Governments built strategic petroleum reserves, chased fuel efficiency, and learned that energy and geopolitics were now inseparable.
Sources & references
3 referencesWell-established. Corroborated by 3 independent sources.
