Peak oil

Arab Oil Embargo: Happy 40th Anniversary!



Forty years ago today, the Organization of Petroleum Exporting Countries (OPEC) announced an embargo against sending oil to the United States out of displeasure for its support of Israel in the Yom Kippur War. A new report by the Institute for Energy Research reminds us all how President Richard Nixon and Congress overreacted and created the first "Energy Crisis" by imposing price controls on fuels. From the IER report:

On October 16, 1973, the Arab members of the Organization of Petroleum Exporting Countries (OPEC ) announced a decision to raise the price of oil by 70 percent a barrel, which was followed by the oil ministers agreeing to an embargo on oil shipped to the United States, a five percent reduction in production from September's levels, and a continuation in production reductions in five percent increments until the organization's economic and political objectives were met.The stated reason for the embargo on the United States was because the U.S. provided military supplies to aid Israel in the Yom Kippur War that Egypt and Syria launched against Israel on October 6, 1973.

While the war ended in the same month that it had started (October 1973), oil prices were raised dramatically to reduce demand to the new, lower level of supply. The market price for oil rose from $3 per barrel to almost $12 per barrel by January 1974. At that time, net imports of petroleum were supplying 35 percent of U.S. petroleum consumption. The embargo, combined with the perverse consequences from oil price controls introduced earlier by Nixon, meant that consumers had to wait for hours in long lines at gas stations, some of which were miles long. President Nixon asked homeowners to turn down their thermostats and for companies to cut back on work hours; and gas stations were asked to hold their sales to a maximum of ten gallons per customer.

The OPEC price hike was a shock, but federal policy made a bad situation worse and helped fuel the catastrophist meme that the world was running out of resources. Remember peak oil? CNN reported back in 2007:

The German-based Energy Watch Group released a report Tuesday saying the world's oil production peaked in 2006 and from now on will drop by around 3 percent a year. It says that by as early as 2030, the global availability of oil will be half of what it was at its peak.

In 1972, The Limits to Growth researchers estimated known global oil reserves at 455 billion barrels. Since then the world has produced very nearly 1 trillion barrels of oil and current known reserves hover around 1.2 trillion barrels, a 40-year supply at current consumption rates.

Now it's "peak everything."

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  1. Jesus Fucking Christ, I’m old.

  2. The most successful boycott since the US embargo on Cuba.

  3. OPEC is the leakiest cartel ever created. The Saudis are typically the only country that sticks to their quota, until they get pissed off at their cheating buddies and jack up production to tank the price.

    Amazingly, the only “experts” who never know this are the ones the DC crowd are listening to.

    1. So, just like ag subsidy production limits.

      1. Yes, except leakier. Just like oil running through your finger.

    2. It’s almost as if it’s nigh impossible to keep a cartel together!

      1. Don’t be ridiculous. Just look at Bromkonvention’s stranglehold on the world’s bromine supply.

  4. Now it’s “peak everything.”

    No, Ron, that’s just a symptom of never reaching peak retard.

  5. Imagine if you could go back in time and tell people that in 40 years we would be EXPORTING more oil than we IMPORTED.…..s-per-day/

    1. But Fox News blowhards all say Obama won’t let us drill in the USA!

      1. Palin’s Buttplug|10.16.13 @ 5:58PM|#
        “But Fox News blowhards all say Obama won’t let us drill in the USA!”

        And slimy apologists like you say that’s not true!

        1. Sevo, the best way to annoy Shriek is to ignore him. He cried like a bitch the other night because he thinks folks here won’t respect him as a “bonafide” libertarian.

          Trust me, he’s like a phishing call. If you just ignore them they will stop calling.

          1. He got his ass kicked this morning on the conflict minerals thing too.

            1. Rin tin tin, indeed

            2. Oh bullshit.

              ‘Old Man with Candy’ was bitching about filling out SEC documents for tin purchases from the Congo and blamed Obama.

              As it turns out it was a GOP amendment and the Congo is a bit player in the tin industry.

              1. Since I didn’t mention Obama, you’re a fucking liar. Again.

                1. Oh, and I didn’t say that the documents were SEC documents, so besides being a fucking liar and blithely ignorant of high school chemistry, you also have shitty reading comprehension. Public school education?

                  1. Here’s your ass back. Again.

                    This is like beating up the retarded kid. Not satisfying because there’s no challenge to it.

        2. Still waiting for that last leg of the Keystone XL pipeline to get approved…

          1. The federal government should not bar the pipeline, but the pipeline should not be able to benefit from eminent domain in its building.

          2. Why? So TransCanada can bypass midwestern refineries and ship product to Europe thereby raising gas prices here?

  6. Two years earlier, Nixon slammed gold conversion process closed as inflation was shoving gold overseas by the buckets.
    Seems those crafty Saudis got wise to getting ever cheaper dollars for their oil, and if you check the price against gold, oil really didn’t cost a whole lot more in the mid ’70s than it did in the late ’60s.
    Blame the ‘price rise’ on Nixon, not the Saudis.

  7. -The stated reason for the embargo on the United States was because the U.S. provided military supplies to aid Israel in the Yom Kippur War that Egypt and Syria launched against Israel on October 6, 1973.

    Yet another reminder of the wisdom of Washington’s warning about ‘entangling alliances.’

    1. Tell us again how much you hate the Joos

      1. Did Washington ‘hate the Joos?’

        1. Do you always respond with questions?

          1. Do you?

            1. Is it important to you how I answer?

              1. Is it?

  8. I honestly can’t imagine living in an America where you were only allowed to buy gas on a designated day.

    1. I was young, pre-teens, but even I knew it was fucked up. I think my parents had WWII flashbacks, which is why I never heard them bitch about it.

    2. Neither could anybody when it happened. People used to cheap gas whenever needed or wanted suddenly couldn’t get it. Not a good situation. Imagine being low on food and super low on gas and it’s not your day for gas, and you don’t live within reasonable walking distance of a grocery store. Oops!

      1. reasonable walking distance of a grocery store


      2. Epi grew up in the era of cheap oil. He used gasoline to cook his dinner, clean his driveway, kill pests, and at the end of the day his mom would serve tall, cool glasses of gasoline over ice in the back yard.

        1. It was a time when men were men, Hugh, and women were men, and some men were women. It was a confusing time. Plus, you get sick of the gasoline after a while and then want to switch to kerosene, but that cost a lot more. Like I said, a confusing time.

    3. Single payer gas coming soon! Obamafuel will accept EBT cards.

      1. Your money’s no good here! Let me get that for you…

        /US Taxpayer to 47%ers

      2. Jordan|10.16.13 @ 6:32PM|#
        “Single payer gas coming soon! Obamafuel will accept EBT cards.”

        And you’ll get it (or NOT) through some web sites!

    4. “In the United States, odd-even rationing was implemented; drivers of vehicles with license plates having an odd number as the last digit (or a vanity license plate) were allowed to purchase gasoline for their cars only on odd-numbered days of the month, while drivers of vehicles with even-numbered license plates were allowed to purchase fuel only on even-numbered days.”

      I wonder if something quite like that would even be possible now, with so many families owning multiple cars – more now than back then, I get the impression. Of course, as always, policies like that hurt the poor more than they hurt the rich: when Mexico City implemented an odd/even license plate policy (just for driving, not for buying gas), people just bought second cars, which the rich are better positioned to do than the poor.

  9. The big thing was the lesson that the US learned – especially the pols. That the ONLY way to address these kinds of issues is to let the market find the clearing price, and then things will quickly return to “normal”.

    Right? Isn’t that what we learned? Especially the pols? Let the market sort it out.


    1. the lesson that the US learned – especially the pols




      1. Thank you for coming out tonight ladies and gentlemen! Tip the veal and try your waitresses!

        1. I think Tman’s spleen fell out.

    2. How much should I charge for these pork bellies? There’s a futures market, and some hog farmers call brokers to negotiate prices, but I NEED A LIST!!!


      He’s super, super serial.

      1. I honestly believe that he is upset that global warming isn’t happening. He really wants all of the awful things he predicted to come true, just so that he can be in the spotlight.

      2. P.S. I hope that motherfucker doesn’t come to hawaii at the same time as me. It looks like his presence lowers the regional temperature by at least 15 degrees.

        1. Nothing can cause the temperature in Hawaii to deviate anywhere outside of 84-88 degrees. Nothing. Except maybe a volcanic eruption, or possibly Sean Connery as Sir August de Wynter. My god that movie was terrible.

          1. Yep. Alaska’s record high temperature is 12 degrees higher than Hawaii’s record high temperature.

            That’s why I love living near the ocean. No AC, and I only use heat maybe 15 days a year…

    2. Wait, green is good, right?

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