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Running Head: ESSAY AND ANNOTATED BIBLIOGRAPHY    1
ANNOTATED BIBLIOGRAPHY AND ESSAY        2
ESSAY AND ANNOTATED BIBLIOGRAPHY ON THE OIL EMBARGO OF 1973
Essay on the Arab Oil crisis
Post World War II a major crisis that occurred in the global scenario is the Arab oil crisis that occurred in the year 1973. The prime reason for this crisis occurred when the oil manufacturing companies of Arab stopped their exports to United States in response to protest for the American military support for the Israel during the war with Egypt and Syria during 1973. With the economic sanction on the oil supply the prices of oil were soaring at the moment and there were long lines in petrol pumps. Some petrol pumps have even consumed their entire reserve and they have even displayed board regarding non availability of the oil. Te major setback occurred to the companies who were completely dependent on the oil as the source of energy for their work. This has created a serious economic downturn for the United States. The initial countries which were targeted for the economic sanctions from the Arab countries are Canada, Japan, Netherlands, United Kingdom and United States. Further the sanction was imposed for countries such as Portugal, Rhodesia and South Africa. The economic sanction extended up to March 1974, and by that time prices of oil were increased up to 400 percent. The event created a serious impact globally both on short term and long term and that have impacted the global economy as well as global politics (Sher, 2017).
The origin of this crisis started in 1969 when after the series of events had led to the final showdown during 1973. At the period of 1969 the American deposit of oil failed to keep a track and meet up with the demand of the oil for the source of energy. During that period the cost of producing oil in Middle East was comparatively low and the reserve was in abundance. That attracted many U.S. companies to explore the place and meet up with the increasing demand of the oil. In the process the companies were making huge money with lower price and the tariffs of the U.S. Imports. Hence to address the situation regarding the huge export of oil from the Middle East a committee was founded named Organization of the Petroleum Exporting Countries (OPEC) by the participation of five oil exporting countries on September 14, 1960. The member countries were Venezuela, Iraq, Saudi Arabia, Iran and Kuwait. The OPEC was formed after the oil producing companies have reduced the price of the oil, however the price of the oil from the companies were always higher than the normal prices of oil in the market. Hence to tackle the situation the committee OPEC was to bring uniformity in the pricing of the oil (Gunter and Henbler, 2020).
The global scenario of the oil market turned during the war of 1967. With the war and consecutively the crisis has completely revamped the present market for oil globally. During the war of 1967 countries such as Saudi Arabia, Iraq, Kuwait, Algeria and Libya have completely banned all the shipments of oil to United States, United Kingdom and West Germany. The flow of the oil has to be completely reorganized around the worlds as the oil from the non Arab countries have diverted towards the economic sanctions of the Europe. Suez Canal was closed during the war and that had created serious problem for the European countries as they were not being able to get the access of oil and thus scarcity was increasing. Just after the initial crisis a total amount of 1.5 million barrels of oil were taken per day back from the market during the period of June to August 1967. After the war the oil market was changed completely and a new concept emerged which termed oil as a weapon. During that period the industrialization was taking a big leap and thus the need for oil as a source of energy was essential and that resulted to massive consumption of oil from the U.S. reserve capacity, thus the imports of oil to U.S. was increasing at a rapid rate. During the same period the oil production...