The History of the 1970s Oil Crisis
11.65 divided by 2.90 is about 4.02, nearly a quadrupling (Federal Reserve History).
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1.What happened to the oil price in late 1973?
11.65 divided by 2.90 is about 4.02, nearly a quadrupling (Federal Reserve History).
2.What is an embargo?
On October 19, 1973, Arab oil producers announced an embargo on the US; it ended in March 1974 after about five months, but the higher prices stayed.
3.Why does an oil price shock hit so many businesses at once?
Oil moves trucks, ships and planes, heats homes and goes into many materials, so it is a cost hidden inside thousands of products.
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Sources (6)
- Federal Reserve History: Oil Shock of 1973-74
- US Department of State, Office of the Historian: Oil Embargo, 1973-1974 (Milestones 1969-1976)
- Federal Reserve History: Oil Shock of 1978-79
- Federal Reserve History: The Great Inflation
- NBER: US Business Cycle Expansions and Contractions
- Eigene Berechnung (Python)
Education only. Not financial advice.