1973-1974 Oil Crisis And US Policy

The research subject of this paper is U.S. policy during the 1973-1974 oil crisis. This study utilized a great deal of related declassified documents and secondary sources which analyzed the features of U.S. policy-making during the oil crisis."Oil crisis" was a new phenomenon in the 20th century, which was due to oil becoming the world’s major energy source, the relative shortage of petroleum products, their prices increasing sharply, a shortage of energy supply, and the resulting economic crisis and political crisis.There have been a total of three oil crises in history, which have all occurred in the second half of the 20th century. This is mainly because the 1960’s, oil gradually replaced coal in many areas of modern industry, one of the main pillars of energy. After the industrial revolution, coal has been the world’s primary energy, to maintain this advantage to the 20th century, 60 years. In 1965, oil for the first time replaced coal as the number one energy source, the start of the so-called "oil era." As a new energy source, oil had many advantages including its easy transport, energy density, and, especially, oil prices were low in the 1970s– oil was therefore synonymous with cheap energy. After Middle East oil reserves were discovered, oil prices had been fixed at around $1 a barrel in the United States. And the public had come to believe that cheap oil was inexhaustible. Americans often described the oil of Saudi Arabia to be as cheap as water. In the 1970s, with US-led major capitalist powers relying heavily on oil, cheap Middle East oil gradually become the base of the world’s energy economy. The data show that by 1973, OPEC members already were producing 55% of the total world oil. As this major economic and energy source was mainly in the hands of a few Arab countries, (e.g., OPEC and the Arab Petroleum Exporting Countries) this condition led generally to an energy monopoly, and further led to the "oil crisis.”The oil crisis of the 1970s led to oil becoming seen as a“weapon,”pushed the world’s oil system to a new era, which also had a large influence on the world economic and political situation of the time. The subject of this paper is the oil crisis of 1973-1974 and the relative U.S. policy, both foreign and economic (and the changes they underwent) during this period. Also discussed are the internal factors and external factors on the United States, the impact of policy decision-making, and its decision-making and oil-producing countries, oil-consuming countries, major international oil companies and the relevant international organizations.The following text is divided into six parts, including an introduction, four chapters and a conclusion. The details are as follows: The introduction discusses the research methods, ideas, meaning, and the subject of the status quo; the first chapter shall introduce the background in the form of the distribution of world oil reserves, the origin of crude oil, crude oil refining capacity, and world oil consumption, which will be followed by an overview of U.S. oil diplomacy after World War II, including the Truman, Eisenhower, Kennedy, Johnson, and Nixon administrations; the second chapter will analyze the outbreak of the October War against the United States begun during the Arab oil embargo, and describes the United States support for Israel in the war which would eventually lead to the policy process of the oil embargo; the third chapter analyzes the countermeasures the United States took during the oil crisis, including the development of the U.S. government policy towards international oil companies, the U.S. energy self-sufficiency policy, Arab countries improving policy, the allies; the fourth chapter discusses the adjustment of U.S. oil policy from four aspects: the first U.S. oil crisis policy adjustments in the Middle East, followed by the U.S. allies, the convening of the International Energy Conference and the establishment of the International Energy Agency, and finally the influence of the oil crisis on the U.S. economy and trade; the conclusion summarizes the special type of decision making during the oil crisis.