1970\'s Oil Crisis the 1973

1970's Oil Crisis

The 1973 and 1979 Oil and Gasoline Crisis

Throughout the 1950's and 1960's, oil supplies had been abundant to the point of glut, and prices were in the basement, however, during this period, the United States began consuming more oil than it could produce from domestic sources, thus, by 1973, oil imports toped 3.4 million barrels per day, or 35% of its supply, with 1 million barrels per day coming from Arab sources (Reid pp). By June, it was estimated that a gasoline supply shortage, ranging from 300,000 to 400,000 barrels per day existed, leading refiner-suppliers to begin putting branded jobbers and dealers on allocation and pulling price protections (Reid pp). Then the Yom Kippur War of October 1973 sent the world economy reeling when at the end of the sixteen day war, OPEC enacted a 70% price increase on remaining oil exports, from $3.01 to $5.12 a barrel, and then two days later boosted prices again to $11.65 a barrel (Reid pp). Although Arab supplies to the United States dried up, the need was met by other sources, but at a reduction in the general world supply that further impacted downstream prices internationally, resulting was rampant inflation, high interest rates, recession and unemployment (Reid pp). At the jobber and dealer level, there was a hunt for supply, and moreover, the price controls that had been put in place not only prevented them from enjoying increased profits but prevent them from passing on much of their increased costs (Reid pp). Many stations were forced to be open only a few hours each day, cars were lining up to get a "ration" of gasoline, and approximately 25,000 stations had closed by the end of the year (Reid pp).

The retail price of a gallon of gasoline in the United States rose from a national average of 38.5 cents in May 1973 to 55.1 cents by June 1974, and the New York Stock Exchange shares lost $97 billion in value in sex weeks (1973 pp). At the height of the crisis, drivers of vehicles with odd numbered license plates were allowed to purchase gasoline only on odd-numbered days of the month, while drivers with even-numbers could only buy on even-numbered days (1973 pp). In the industrialized countries, especially the United States, the crisis was borne mainly by the unemployed, the marginalized social groups, certain categories of aging workers, and increasingly, by younger workers (1973 pp). Throughout the United States, schools and offices often closed down to save on heating oil, and factories were forced to cut production and lay off workers (1973 pp).

A national speed limit of 55 miles per hour was imposed to help reduce consumption, a law that was not completely reversed until 1995 (1973 pp). Year-round Daylight Saving Time was implemented, and at 2:00AM local time on January 6, '974, clocks were advanced one hour across the nation (1973 pp). However, this move sparked much criticism because it forced many children to commute to school before sunrise (1973 pp). Thus, the clocks were turned back on the last Sunday in October as originally scheduled, and in 1975 clocks were set forward one hour at 2:00 AM on February 23 to accommodate the children (1973 pp). The pre-existing daylight-saving rules, calling for the clocks to be advanced one hour on the last Sunday in April, were restored in 1976, and changed again in 1987 to the first Sunday in April (1973 pp).

The crisis also prompted a call for individuals and businesses to conserve energy, the most notably a sophisticated campaign by the Advertising Council which used the tag line "Don't Be Fuelish" (1973 pp). Moreover, newspapers throughout the country, carried full-page advertisements that featured cut-outs that could be attached to light switches that bore the slogan, "Last Out, Lights Out: Don't Be Fuelish" (1973 pp).