A Short History of Oil Crises Oil quite literally makes the world as we know it turn. Shortages or rising prices unsurprisingly cause panic: but what causes them? We delve into the history of how and why oil crises have come about in the past, the impact they've had, and their legacy in the modern world. The importance of oil in modern economic and political terms cannot be underestimated. Ever since the early 20th century, oil (and in particular petroleum and kerosene) has become the dominant energy source across the world, powering everything from cars and domestic heating to huge industry titans and manufacturing plants. Those who have oil reserves wield a huge amount of power over our oil-centred energy systems, and those who buy oil are (often) cripplingly dependent on the market, and the diplomatic relations which drive it. As a sudden rise in the price of oil that is often accompanied by decreased supply. Since oil provides the main source of energy for advanced industrial economies, an oil crisis can endanger economic and political stability throughout the global economy. In the post-World War II period there have been two major oil crises. The first occurred in 1973, when Arab members of OPEC (Organization of the Petroleum Exporting Countries) decided to quadruple the price of oil to almost $12 a barrel . Oil exports to the United States, Japan, and western Europe, which together consumed more than half the world’s energy, were also prohibited. OPEC’s decision was made in retaliation for Western support of Israel against Egypt and Syria during the Yom Kippur War (1973) and in response to a persistent decline in the value of the U.S. dollar (the denominated currency for oil sales), which had eroded the export earnings of OPEC states.