Canada, like most industrialized countries, was unprepared for the consequences of the 4-fold increase in international oil prices and the partial oil embargo imposed by the Arab members of the Organization of Petroleum Exporting Countries (OPEC) in the wake of the 1973 Middle East war. This included the United States and its allies in Western Europe. econ analysis of gasline shortage cites charge shortage is contrived by major oil cos to boost prices. The 1973 oil crisis began in October 1973 when the members of the Arab members of the OPEC plus Egypt and Syria) proclaimed an oil embargo.By the end of the embargo in March 1974, [1] the price of oil had risen from $3 per barrel to nearly $12. Source: Glenbow Archives, NA-2864-20312, The World Petroleum Congress, held for the first time in Canada, attracts industry and political leaders from around the world. The 1973 oil crisis was a major factor in Japan's economy shifting away from oil-intensive industries and resulted in huge Japanese investments in industries such as Electronics. The graph to the right is based on the nominal -- not real -- price of oil, and so understates prices of more recent years. The crisis of 1973 got the U.S. and much of the world thinking about alternative energy . However, in the early 1970s it began to display its strength. Secondly, what was distinctive about Japan's reaction to the oil crisis as compared with the reactions of other countries? Since 1973, OPEC failed to hold on to its preeminent position, and by 1981, its production was surpassed by that of other countries. President Nixon named William Simon as an official "energy czar," and in 1977, a cabinet-level Department of Energy was created, leading to the creation of the United States's Strategic Petroleum Reserve. The rule had been intended to promote oil exploration. Lougheed responded with an increase on royalty charges on publicly-owned (Crown) resources. Source: CP Photo/Pat Price, 673836, Images such as these feed concerns through the Western world about environmental damage due to industrial development. It was resonant also, because it was around this time that the American geophysicist, M. King Hubbert, had accurately predicted the peak and long-term decline of conventional oil productio… The two worst crises of this period were the 1973 oil crisis and the 1979 energy crisis, when the Yom Kippur War and the Iranian Revolution triggered interruptions in Middle Eastern oil exports. In the 1970s, Alberta was hit by a modern-day gold rush. The crisis was further exacerbated by government price controls in the United States, which limited the price of "old oil" (that already discovered) while allowing newly discovered oil to be sold at a higher price, resulting in a withdrawal of old oil from the market and artificial scarcity. The targeted countries responded with a wide variety of new, and mostly permanent, initiatives to contain their further dependency. Source: Provincial Archives of Alberta, P1304, Discovered by British Petroleum in 1923, the large Wainwright oil field revives hopes for the Alberta oil industry.Source: Provincial Archives of Alberta, A10793, The agreement transferring jurisdiction of natural resources from the federal to the provincial government is signed in Ottawa, December 14, 1929, and enacted the following year. First, why and how was Japan able to recover from the 1973 oil crisis? In 1978, a revolution overthrew the America-friendly government of the Shah of Iran, replacing him with a theologically-dominated, anti-American government headed by the Ayatollah Khomeini. Concurrently, in the early 1970s, the fall in the U.S. dollar went along with a fall in the price of oil (in USD). The first oil shortage crisis, which lasted from October 1973 until March 1974, was set off when the Organization of Arab Petroleum Exporting Countries, or the OAPEC (consisting of the Arab members of OPEC, plus Egypt, Syria and Tunisia), proclaimed an oil embargo. Forty years on, the effects of the 1973-74 oil crisis still shape British foreign policy in the Middle East Yesterday marked the 40th anniversary of the start of the 1973 oil shock. Although not directly related to the oil sector, this concept forms the basis for future anti-pollution and climate change strategies. and caused massive shortages in the US. A parallel counter-congress and protests occur in the city at the same time. The United States supported Israel, and Israel was attacked from two sides on October 6 in what became known as the Yom Kippur War. At the federal level, the Office of Energy Conservation was created in 1974. 1 oil discovery, in the Mississippian geological structure under Turner Valley, sets off another oil boom for the region. Although the oil field here is relatively small and nearly exhausted after a few years of production, it marks the beginning of Canada’s oil industry. Downsizing automobiles might have been considered profitable; however, the smaller size affected safety regulations. © 1995 - 2021 Government of Alberta  |   Copyright and Disclaimer  |   Privacy  |   Accessibility, Energy Crises, Political Debates and Environmental Concerns: 1970s-1980s. That was kicked off by Arab nations refusing to ship oil to allies who had assisted Israel during the Yom Kippur war- as close as you can get to an economic impact without an economic cause. This set the stage for the struggle for control of the world's natural resources and for a more favorable sharing of the value of these resources between the rich countries and the oil-exporting nations of OPEC . Source: Provincial Archives of Alberta, P1342, Oil derricks dot the landscape, and smoke from a new oil well rises from the horizon beyond the hamlet of Redwater. Even during the apparent oil shortage of the 1973 OPEC oil shock, this tax reduced Alberta’s oil profits. The Oil Crisis Recession: (November 1973–March 1975) Duration: 16 months ...  A spike in oil prices has preceded or coincided with 10 out of 12 post-WWII recessions. In the U.S., drivers of vehicles with license plates having an odd number as the last digit were allowed to purchase gasoline for their cars only on odd-numbered days of the month, while drivers of vehicles with even-numbered license plates were allowed to purchase fuel only on even-numbered days. if (window.showTocToggle) { var tocShowText = "show"; var tocHideText = "hide"; showTocToggle(); } The U.S. "Big Three" automakers' first order of business after Corporate Average Fuel Economy ( CAFE) standards were enacted was to downsize existing automobile categories. Saudi Arabia, trying to gain back market share, increased production and caused downward pressure on prices, making high-cost oil production facilities less profitable or even unprofitable. In retaliation, some members of the Organization of Petroleum Exporting Countries (OPEC) and a few similarly minded oil-rich nations ceased all oil exports to the United States and nations that supported Israel and raised their price of oil by seventy percent. It confined its activities to gaining a larger share of the revenues produced by Western oil companies and greater control over the levels of production. It encourages the concept of “sustainable development” in an attempt to balance First World concerns about human rights and environmental degradation with Third World nations’ need for economic development. Source: CP Photo/Adrian Wyld, In 2002, conventional oil production in Alberta is surpassed by oil sands production for the first time - a sign of the changing focus of Alberta’s oil sector. By putting an end to decades of cheap energy, the 1973-74 oil crisis, which was led by Arab members of the Organization of Petroleum Exporting Countries (OPEC), exacerbated the economic difficulties facing many industrialized nations, forced developing countries to finance their energy imports through foreign borrowing, and generated large surpluses for oil-exporters. When in 1991 the Soviet Union was disbanded, the price of oil was at a level of just 12 dollars per barrel. This exacerbated a recession that had already begun, and led to a global recession through the rest of 1974. Oil exporters such as Mexico, Nigeria, and Venezuela, whose economies had expanded frantically, were plunged into near-bankruptcy, and even Saudi Arabian economic power was significantly weakened. The response of the Nixon administration was to propose doubling of the amount of military arms sold by the United States. Gasoline prices, which had stabilized somewhat but not really recovered since 1973, spiked again. Ostensibly a reaction to the emergency re-supply effort that had enabled Israel to withstand Egyptian and Syrian forces (while at the same time the Soviets were resupplying the Arab forces), the Arab world imposed the 1973 oil embargo against the United States, Western Europe, and Japan. DESCRIPTION: The 1973 … By the summer of 1971, Nixon was under strong public pressure to act decisively to end the dilemma of rising prices and general economic stagnation (see " stagflation"). The best one I found was the 1973 Oil Crisis. Year-round Daylight Saving Time was implemented: at 2:00 a.m. local time on January 6, 1974, clocks were advanced one hour across the nation. Source: Provincial Archives of Alberta, GR1989.0516.394#3. The 1973 oil crisis 1.1 Events leading to the crisis There have been a lot of factors that have to be taken into account in order to explain the crisis. OPEC devised a strategy of counter-penetration, whereby it hoped to make industrial economies that relied heavily on oil imports vulnerable to Third World pressures . When reduced demand and over-production produced a glut on the world market in the mid-1980s, oil prices plummeted and the cartel lost its unity. Before the mass production of automatic overdrive transmissions and electronic fuel injection, the traditional FR (front engine/rear wheel drive) layout was being phased out for the more efficient and/or integrated FF (front engine/front wheel drive), starting with compact cars. The discovery of the Leduc oil field, then the largest and most lucrative yet found, comes after decades of fruitless searching and drilling. The divisions within OPEC made subsequent concerted action more difficult. U.S. President Richard Nixon presided over an economy in which growth was already sluggish, and in which inflation was already troubling. //