oil (part 2)

part 1 of oil notes here:

http://getrevising.co.uk/revision-notes/oil

price of oil- supply shocks

a significant interruption to supply due to an economic, environmental or political event

opec- organisation of petroleum exporting countires- the OPEC oil embargo:

• co-ordinate petroleum prices among member countires to secure fair and stable prices for petroleum producers, efficient economic regular supply to consuming nations and fair return to those investng in the industry
• OPEC oil embargo- limited supply to US in response to Yom Kippur war between Egypt and Israel to support Egypt and oppose countries supporting the Israelis. the embargo was later extended to other countires
• Impact- world oil prices increased, daily shipment into US from middle east fgell from 1.2million barrels to 19,000 barrels, cars faced long line at filling stations with very high prices, fear/panic among US citizens, speed restrictions put in place to save fuel, USA looked for alternative sources of energy

reasons for recent rapid increase in price of oil

• problems in middle east made oil exports…