Rising oil prices, surging inflation: The Arab embargo 50 years ago weaponised oil

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Rising oil prices, surging inflation: The Arab embargo 50 years ago weaponised oil
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To inflict economic trauma.

Fifty years ago, a secret deal among Arab governments triggered one of the most traumatic economic crises to afflict the United States and other big oil importers.

Oil’s global regime change The embargo’s disruptive power was due to two key factors: Opec’s dominance of world oil supply, and oil’s supremacy in the global energy mix. How the oil price spike played out in the West In the West, price increases wreaked havoc on economies and transport systems that were far less efficient than today. Inflation soon boiled over into “stagflation,” a combination of economic stagnation and high inflation. Misguided policies, including gasoline price controls and rationing, exacerbated shortages, creating long lines at service stations and emboldening gasoline thieves.

50 years later, new pressures Fifty years on, markets have changed. But oil continues to be the world’s dominant energy source.

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