What did the United States do in the early 1970s to resolve the disparity between oil production and consumption? What events caused the sudden oil shortages of the mid 1970s and then the return to abundant, but more expensive, supplies?

Question

What will be an ideal response?

Answer 1

"To fill the energy gap between rising consumption and falling production, the United States depended increasingly on imported oil, primarily from Arab countries of the Middle East. Because imported oil cost only $2.30 per barrel ($9.18 in 2002 dollars) in the early 1970s and Middle Eastern reserves were more than adequate to meet the demand, this course seemed to present few problems."
"A group of predominantly Arab countries known as the Organization of Petroleum Exporting Countries (OPEC) formed a cartel and agreed to restrain production in order to get higher prices. Imported oil began to cost more in the early 1970s, and then, in conjunction with an Arab-Israeli war in 1973, OPEC initiated an embargo of oil sales to countries, like the United States, that gave military and economic support to Israel. The effect was almost instantaneous, because we depend on a fairly continuous flow from wells to points of consumption. Spot shortages occurred, which quickly escalated into widespread panic because of our widespread dependence on cars and trucks. We were willing to pay almost anything to have oil shipments resumed." By continuing to limit oil production all through the 1970s, OPEC was able to keep supplies tight enough to force prices higher and higher.