Such reliance means that seller nations can control energy prices, forcing buyer nations to pay more as supplies dwindle. This became clear in 1973, when the Organization of Petroleum Exporting Countries (OPEC) resolved to stop selling oil to the United States. The predominantly Arab nations of OPEC opposed U.S. support for Israel in the Arab–Israeli Yom Kippur War and sought to raise prices by restricting supply. OPEC’s embargo created panic in the West and caused oil prices to skyrocket, spurring inflation. Fear of oil shortages drove Americans to wait in long lines at gas pumps. A similar supply shock occurred in 1979 in response to the Iranian revolution. Today, experts attribute the recent fall in global oil prices to increased supply from hydraulic fracturing in the United States, followed by decisions by Saudi Arabia and OPEC to boost their own production, apparently hoping to keep prices low and drive new Western competitors out of business.
With the majority of world oil reserves located in the politically volatile Middle East, crises in this region are a constant concern for Western policymakers. The democratic street uprisings of the “Arab Spring” in 2011 put leaders of Western nations in an awkward position, because they had long supported many of the Middle East’s autocratic rulers. These rulers had facilitated Western access to oil, even as they suppressed democracy in their own societies.
The Arab Spring uprisings were part of a long history of events that have affected oil prices, stretching back through the two U.S.-led wars in Iraq, the Iran–Iraq war of the 1980s, and the 1973 OPEC embargo, and extending forward into recent events in Syria, negotiations with Iran over its nuclear program, and the rise of the terrorist Islamic State (ISIS).