The Destabilizing Force of the 1973 Oil Embargo

1973 Oil Embargo pic
1973 Oil Embargo
Image: npr.org

Oklahoma City, Oklahoma-based energy executive and attorney Duke Ligon has built up a distinguished career as counsel, founder, or board member of a wide range of oil and gas companies in his region. A graduate of the University of Texas School of Law, he has served his alma mater as an advisor to its Kay Bailey Hutchison Center for Energy, Law & Business. As part of his long career in the industry, Duke Ligon oversaw operations for an oil importing program associated with the White House Energy Policy Office and the federal Oil Policy Committee before and during the days of the global embargo that began in 1973.

The embargo came about after members of the Organization of the Petroleum Exporting Countries (OPEC) chose to retaliate for the United States’ support of Israel during the Arab-Israeli War. OPEC’s membership consisted then, as it does now, of a number of the oil-exporting nations of the Middle East. In addition to forbidding petroleum exports to the United States, OPEC members banned countries such as the Netherlands, which had also given support to Israel, from receiving their oil supplies. In addition to these prohibitions, exporters elected to introduce cuts in the amount of oil they produced for world markets.

By that time, the American economy had become increasingly dependent upon the importation of foreign-produced petroleum products, and the embargo only exacerbated that situation. By the time the embargo ended in early 1974, American gas prices had more than doubled.

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