Table of Contents:
Energy Crisis of 1979
Causes
1. Oil crisis 1973
2. The energy crisis occurred in the wake of the Iranian Revolution. Amid massive protests, the Shah of Iran, Mohammad Reza Pahlavi, fled his country in early 1979, allowing Ayatollah Khomeini to gain control. The protests shattered the Iranian oil sector. While the new regime resumed oil exports, it was inconsistent and at a lower volume, forcing prices to go up. Saudi Arabia and other OPEC nations, under the presidency of Dr. Mana Alotaiba increased production to offset the decline, and the overall loss in production was about 4 percent. [2]
Results
However, a widespread panic resulted, driving the price far higher than would be expected under normal circumstances. In the United States, the Carter administration instituted price controls.[3] In 1980, following the Iraqi invasion of Iran, oil production in Iran nearly stopped, and Iraq's oil production was severely cut as well.
Positives:
- US implimented energy saving devices, and CAFE standards for fuel efficiency for automobiles.
Negatives:
Recovery
After 1980, oil prices began a six-year decline that culminated with a 46 percent price drop in 1986. This was due to reduced demand and over-production, and caused OPEC to lose its unity. Oil exporters such as Mexico, Nigeria, and Venezuela expanded. The US and Europe got more oil from Prudhoe Bay and the North Sea.
Links:
Comments (0)
You don't have permission to comment on this page.