A Meeting of the Sheiks
Citizens of the United States, men and women, have always cherished their liberty, and after 1908, when Henry Ford introduced his Model T, they have increasingly identified a part of that liberty with the automobile. With six percent of the world’s population, the United States consumes a third of the world’s energy—much of it in the form of petroleum. Through the 1960s, this posed little problem. Gasoline was abundant and cheap. Indeed, at the start of the decade, U.S. and European oil producers slashed their prices, a move that prompted key oil nations of the Middle East—Iran, Iraq, Kuwait, and Saudi Arabia, plus Venezuela in South America—to band together as the Organization of Petroleum Exporting Countries (OPEC) on September 14, 1960, to stabilize prices. (More nations joined later.) Beginning in 1970, OPEC began to press for oil price hikes, and on October 1.7, 1973, OPEC temporarily embargoed oil exports to punish nations that had supported Israel in its recent war with Egypt. Chief among the embargo’s targets was the United States.
The effects of the OPEC embargo were stunning. Not only did prices shoot up from 38.5 cents per gallon in 19 73 to 55.1 cents by June 1974, gasoline shortages were severe in some areas. Americans found themselves stuck in gas lines stretching from the pumps and snaking around the block.
Cruising full speed ahead since the end of World War II, Americans were forced to come to grips with an energy crisis, cutting back on travel and on electricity use. The public endured an unpopular, but energy-(and life-) saving 55-mile-an-hour national speed limit, in addition to well-meaning, if somewhat condescending lectures from President Jimmy Carter, who characteristically sported a cardigan sweater on TV appearances because he had turned down the White House thermostat as an energy-conserving gesture. In a modest way, Americans learned to do without, and oil consumption was reduced by more than 7 percent—enough to prompt some OPEC oil price rollbacks by the early 1980s. By this time, too, OPEC’s grip on key oil producers had slipped as various member producers refused to limit production.