During the infamous oil embargo of 1973, when the world’s petroleum-producing countries stopped exporting to the United States during the Yom Kippur War, the effects on the U.S. were disastrous. Gasoline prices jumped by almost 50 percent, gas stations had to ration fuel, and lines at the pump snaked for miles. President Richard Nixon announced desperate measures to save energy, from asking workers to start their day an hour earlier to pleading with citizens not to put up Christmas lights.
More than 50 years later, war in the Middle East has once again stalled the flow of much of the world’s oil. Around 20 percent of global petroleum exports pass through the Strait of Hormuz, which is effectively closed as it remains near the center of hostilities that began when the U.S. and Israel launched strikes on Iran late last month.
While this supply shock is already showing up in prices at American gasoline pumps, the domestic effects will be far more muted than they were in 1973. This is in part because of the fracking boom, which unlocked so many of the country’s massiv... Read more
