Gas prices across the country have been on a steady increase during the past three weeks as the Middle East has been involved in the throes of civil unrest. Is this an impending gas crisis that could reach the scale of the 1973 oil embargo implemented by OPEC?
There is no such shortage of oil to warrant the increase in gas prices that are now skyrocketing across the country. The United States reserves are at a 20-year high, according to the website Global Research and the speculative market is driving the bus on this latest price increase that is expected to drive gas prices over the $4 a gallon mark before summer.
How does this compare to other gas crisis situations in the past? It does not compare to any of the price increase situations in the 1970s, it will be far worse. It is an alarming trend that the price of oil is now being controlled by the volatile commodity markets. The following are circumstances that led to previous high gas prices.
1973: Oil Embargo by OPEC Creates Shortages
OPEC leaders made a decision to cut back oil production in response to the United States choosing to arm its allies, Israel, during the Yom Kippur War. This NBC Nightly News report on the incident from 1973 goes on to explain the escalating crisis. OPEC agreed to cut production of oil 5 percent per month until Israel pulled out of the Sinai.
Interestingly, the Shah of Iran played a major part in the oil embargo of 1973. This might have led the United States to allow his overthrow in 1979 and eventually led to the next major oil crisis. The Shah of Iran was one of the most outspoken OPEC members that pushed for the 1973 oil embargo.
1979-1980: Gas Crisis Blamed on Iranian Revolution
The 1979 overthrow of the Shah of Iran and the rise to power of the Ayatollah Khomeini in Iran were the reasons given for the 1979 gas crisis. In reality, it was another price increase implemented by Saudi Arabia and OPEC. In 1980, gas prices reached $1.25 for unleaded. The price of gas was effectively doubled since 1976.
2005: Gas Crisis Blamed on Hurricane Katrina
The devastation in the Gulf of Mexico dealt by Hurricane Katrina was the reason given for gas prices increasing in 2005. Gas prices increased from $1.88 a gallon in 2004 to $2.30 a gallon for 2005. The increase was not as sharp as expected, but it was just as unnecessary.
2008: Gas Prices Rise to $3.57 Per Gallon
The most recent rise in gas prices in 2008 was driven purely by speculation much like the current price increase. Ultimately as Newsweek reported in 2008, the only sure way for the United States to curb its usage of gas and change its habits will be for the price of gas to reach the $6 mark. Is this the ultimate goal of government to rid us of our addiction to foreign oil?
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