The first oil crisis broke out on October 16, 1973.Since October 1973The Fourth Middle East WarBurst,Organization of Petroleum Exporting Countries(OPEC) In order to attack Israel, its rival, and the countries that support Israel, it announced an oil embargo and suspended exports, causing the rise of oil prices.At that time, the price of crude oil rose from less than $3 per barrel in 1973 to more than $13, which was one of the three major oil crises in the second half of the 20th century.[1]
oil crisis It refers to the economic crisis in the world oil field.The so-called economic crisis refers to the serious imbalance or violent shock of the economic proportion.
Event background
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1973 Oil Crisis Oil Price Change Chart[1]
From 1950 to 1973, the price of crude oil was artificially low by the seven major companies, with an average of about $1.80 per barrel, only about half the price of coal.afterOPECIt was only in January 1973 that the level of the struggle for the first time rose to US $2.95 a barrel.Oil producing countries are dissatisfied with the old capitalist oil system, especially the low price.The demand for oil in the western world has increased sharply, but,Western Oil CompanyHowever, they refused to give in to the demand of developing countries, which mainly produce oil, to raise prices. The contradiction between the two sides is becoming increasingly acute, and there is a tendency of tension between the two sides.In October 1973,The Fourth Middle East WarBurst,arab countriesOne after another, Western countries supporting Israel were asked to change their attitudes towards Israel and decided to use oil weapons to teach Western powers a lesson.On October 16, 1973,Organization of Petroleum Exporting CountriesDecided to raise the price of oil. On October 17, 1973, the Arab oil producing countries in the Middle East decided to reduce their oil production, and developedcapitalist countryAn oil embargo was imposed.At that time, most of the oil used by the major capitalist countries, especially Western Europe and Japan, came from the Middle East, and a large part of the oil used by the United States also came from the Middle East.The oil price increase and embargo immediately caused chaos in the western economies.Before the price increase, the price of oil was only $3.01 per barrel. By the end of 1973, the price of oil had reached $11.651 per barrel, which was three to four times higher.The increase in oil prices has greatly increased the internationalIncome and expenditure deficitFinally triggered the biggest economic crisis in the post-war capitalist world from 1973 to 1975.
Main impacts
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The oil crisis has had a great impact on the United States and other countries that rely on cheap oil to start their own businesses, deepeningWorld economic crisis。The industrial production of the United States declined by 14%, while that of Japan declined by more than 20%. The productivity growth of all industrialized countries slowed down significantly.The economic growth rate in 1974 was - 0.5% in Britain, - 1.75% in the United States and - 3.25% in Japan.However, the Arab countries that launched the oil war therefore strengthened their economic strength. Ten billion oil dollars flowed to the Middle East. According to statistics, the price increase alone increased the oil revenue of Arab countries from 30 billion dollars in 1973 to 110 billion dollars in 1974.
Since the discovery of oil, the fate of people in the Middle East has begun to change.Especially after the oil crisis, huge wealth poured into the Middle East, as if overnight, the oil producing countries in the Middle East had transited from extreme poverty to extreme wealth.The government revenue of Saudi Arabia, the world's largest oil producer, was only 1.4 billion US dollars in 1971, while it exceeded 100 billion US dollars after the oil crisis broke out.With the arrival of petrodollars, the Middle East oil producing countries have started all-round economic development and significantly increased national welfare benefits with incredible capital investment and more than usual construction scale in the past few decades.The modern industry in this area has begun to take shape, and the desert agriculture has been vigorously developed. Modern cities have sprung up, and high-grade highways extend in all directions.Due to the increase of fiscal revenue, oil producing countries in the Middle EastFiscal surplusIt is used to repay domestic debts and build infrastructure.staySaudi ArabiaandThe United Arab Emiratesetc.Gulf StatesThe infrastructure construction projects participated by foreign enterprises have been started one after another, and the capital demand for project financing is huge.In Saudi Arabia, power projects alone need $100 billion over ten years.The rich Gulf countries are the largest markets for exporters from other Arab countries and the main sources of capital and investment from other Arab countries.
There are many reasons why this crisis has a great impact.First, it was a big surprise to the politicians of the United States, Europe and Japan.Second, the economy of western developed countries is too dependent on oil, too dependent on oil in the Middle East, unable to withstand the storm.The third is the timing. Just in time for another Western economic recession after the war, the oil embargo and price rise caused a "compound effect" of the economic recession.
The crisis also caused great losses to the Arab oil producing countries themselves.The embargo on production reduction has greatly reduced their oil exports and reduced their market share.It can be seen that the oil weapon is also a double-edged sword, which cannot be used in many ways.
harvest
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After thisoil crisis Western countries generally feel strongly the importance of oil to their economic, political and social life.At the same time, it is generally felt that the old practice of letting a country's oil production, supply, refining and marketing activities mainly be dominated by a few integrated large multinational oil companies can no longer adapt to the new form.These companies, even if they are registered in the country where the company is registered or even the government of the country where the company is registered owns a large number of shares, because they have complex and multifaceted interests in countries around the world, they are often not able to serve the interests of the country where the company is registered at a critical moment.Therefore, western countries have generally and substantially revised their own oil policies, greatly strengthened the control over oil resources, production, supply, sales and market, and strengthened the management and restrictions on foreign oil companies.During this period, Japan, South Korea, Canada, the United Kingdom, Denmark, Norway, Malaysia, the Soviet Union and other countries have established national oil companies.By the end of the twentieth century, more than 100 national oil companies had been born.
Ex post reaction
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The first oil crisis in 1973 hit the western economy heavily. In order to deal with the possible new oil crisis, 13 countries gathered in Washington from February 11 to 12, 1974 at the initiative of the United States, held a meeting of oil consuming countries, and decided to establish an energy coordination group.Later, the International Energy Agency was established, whose main function is to promote its member countries to establish emergency oil reserves or strategic oil reserves;Coordinate the oil allocation among member countries in case of oil supply interruption caused by emergencies.
Related events
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On October 6, 1973, the Arabs used the opportunity of "Yom Kippur Day" to launch an attack on Israel and recover the lost land.At the beginning of the war, the Arabs won successively, but a week later, the war situation reversed, Israel began a large-scale counter attack, and Egypt was at a disadvantage.
At this time, Arab oil producing countries were negotiating with foreign oil companies to raise the price of crude oil.On October 14, 1973, the negotiations broke down. On October 16, 1973, representatives of the five Arab oil producing countries in the Gulf and Iran met in Kuwait and decided to unilaterally raise the bid price of each barrel of crude oil by 70% to US $5.11.The "seven sisters" who have controlled the world market for a long time have no choice but to decide the oil priceOPECHands.
On October 17, 1973, the oil ministers of Arab oil producing countries held a meeting to discuss how to support Egypt with practical actions, attack the United States and other Western countries that support Israel, and force them to stand on the Arab side politically.The meeting did not adopt Iraq's proposal for an immediate oil embargo, and decided to immediately and gradually reduce production/export and oil supply to the United States and the European Union.First, cut the daily output and supply in September 1973 by 5%, and then increase or decrease by 5% every month until the goal is achieved.The United States did not agree. On October 19, 1973, it announced that it would provide US $2.2 billion in military assistance to Israel.This angered Arab oil producing countries, and Libya announced an oil embargo to the United States the same day.On October 20, 1973, Saudi Arabia and other Gulf oil producing countries acted in concert to embargo oil to the United States and the European Union.The world market suddenly reduced the oil supply by 5 million barrels per day.The oil production of the United States has been declining, unable to increase production, so the oil price has soared, and many gas stationsLong queues of cars。OPEC doubled the oil price to US $11.65 per barrel in late December 1973.
The crisis was earth shaking. More than 80% of the oil in Western Europe and Japan was imported from the Middle East, which was far more hit than the United States.In late November 1973, the European Community expressed its support for the Arabs on the Middle East issue, and the Arab oil producing countries removed them (except the Netherlands) from the embargoed "black list".On November 22, 1973, Japan also announced that it would side with the Arabs.The United States and the Netherlands are isolated.
The embargo ended on 18 March 1974.
significance
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The first oil crisis was the dual product of reducing oil supply and increasing oil prices.
The first oil crisis was a major turning point for the world oil industry.
The first oil crisis has an extremely strong political color.
