1973 energy crisis and its effect on world economy.

Origins of the 1973 world oil shock World competition over resources The Arab-Israeli conflict triggered an energy crisis in the making. Before the embargo, the industrialized West, especially the United States, had taken cheap and plentiful petroleum for granted. (Indeed, the form American cities took after World War II - with expansive suburbs full of detached, single-family homes - depended on the automobile as the principal means of transportation - a form that consumes oil en …

…are clear - it effectively doubled the real price of crude oil at the refinery level, and caused massive shortages in the US. This would exacerbate a recession that had already begun, and lead to a global recession through the rest of 1974. Over the long term, the oil embargo would change the nature of policy in the West, towards more exploration, towards energy conservation, and towards more restrictive monetary policy, which more aggressively fought inflation.