The oil crisis of the 1970s had a tremendous political, social, and economic impact on the United States, and its reverberations continue to be felt to this day. This event dramatically illustrated American dependence on fossil fuels, and raised a lot of questions about the country's energy policy and the security of its energy supply.
Several events combined to bring about the energy crisis of the '70s. The first was a dramatic rise in energy consumption, with the United States consuming a huge percentage of the world's energy in proportion to its population. Domestic oil production declined at the same time, leading the country to lean heavily on foreign oil, and in 1973, the US was placed under an OPEC embargo for political reasons. Middle Eastern members of OPEC wished to protest American involvement in an ongoing conflict with Israel, and these nations struck the country where it hurt, depriving them of oil in 1973 and again in 1977.
One of the most immediate effects of the embargo was skyrocketing energy prices as a result of limited supply and heavy demand. Rationing went into effect, with supplies of petroleum products being carefully doled out with ration cards and flag systems, in which people could take turns buying gas and other fuels on the basis of license plate numbers. At the same time, the stock market contracted radically, an event that foreshadowed future stock market instabilities linked to the price of oil.
