On Dec. 16, 1979, Libya joined 4 other OPEC nations in raising crude oil prices, dramatically impacting the U.S. economy.
The Iranian revolution earlier that year had resulted in a disruption in Iranian oil imports. Saudi Arabia and other OPEC nations increased production to offset this decline, raising oil prices. Additionally, the near disaster at Three Mile Island on March 28 increased energy anxieties throughout the United States.
Auto companies were unprepared for the sudden rise in fuel prices. As the price of oil rose from $15.85 to $39.50 over the next 12 months, motorists began panic-buying gasoline, leading to long lines at gas stations.
To fight this shortage, California, Pennsylvania, New York, New Jersey, Oregon and Texas implemented odd-even gas rationing.
President Carter encouraged citizens to do what they could to reduce energy use. High oil prices caused industrial nations to take steps to reduce dependence on OPEC oil. Non-OPEC production dramatically increased, notably in the U.S.S.R, Venezuela, Nigeria and Alaska.
By 1986, daily worldwide demand for oil dropped by 5 million barrels. OPEC's market share was reduced from 50% in 1979 to 29% in 1985. The resulting increase in fuel economy led to an oil glut in the 1980s. Although demand for OPEC oil eventually would rise to pre-1979 levels, the western world’s dependence on OPEC oil would never be the same.
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