Changing Contours of Life 1145

Oil and the Global Economy

The Six-Day Arab-Israeli War of 1967 and the 1973 Yom Kippur War both
resulted in easy Israeli victories over their Arab rivals. Israel now held all of
Jerusalem, a holy city for Christians, Jews, and Arabs, and occupied the West
Bank and the Gaza Strip. While the United States has almost always sup­
ported Israeli actions, the plight of the stateless Palestinian people has
attracted the attention of Arab states, in particular. In 1973, following a
short, unsuccessful war against Israel by its Arab neighbors, the oil-producing
Arab states began an embargo of the supply of oil from the Middle East; it
was undertaken by the Organization of Petroleum Exporting Countries
(OPEC).
The Arab oil embargo led to a rapid rise in the price of oil and contributed
to the high inflation that undermined Western economies for the rest of the
1970s. Dependency on oil led states to urge people to consume less gasoline
(for example, by encouraging greater use of public transportation and, in the
United States, by reducing speed limits). Britain and Norway each began to
extract oil in the stormy North Sea. Some European countries, especially
France, had already begun to develop nuclear installations to generate more

energy.

The oil crisis helped bring an end to what had been a long period of rela­

tive prosperity and stability. The subsequent rising energy prices undermined

British motorists waiting for gasoline during the Arab oil embargo in 1973. The sign

on the left indicates that French motorists are welcome to wait as well.