Europe and the 1973 Oil Shock
by EU member states and other Western European countries acquired the bulk of their crude oil, petroleum, and natural gas supplies from the Middle East. At that point in time ideas or policies relating to energy security for Western Europe concentrated upon maintaining the level of crude oil and natural gas shipments from the Middle East rather than obtaining supplies from anywhere else. In the 1950s and 1960s, the cost of crude oil and related products from the Middle East was at very low levels at less than $2 a barrel, which assisted strong economic growth in Western Europe taken as a whole.
EU member states and other Western European countries acquired the bulk of their crude oil, petroleum, and natural gas supplies from the Middle East. At that point in time ideas or policies relating to energy security for Western Europe concentrated upon maintaining the level of crude oil and natural gas shipments from the Middle East rather than obtaining supplies from anywhere else. In the 1950s and 1960s, the cost of crude oil and related products from the Middle East was at very low levels at less than $2 a barrel, which assisted strong economic growth in Western Europe taken as a whole.
It was low fuel prices, which in the first place had encouraged greater fuel consumption and encouraged consumers within the EU member states to use energy without consideration to efficiency or the security of present as well as future fuel supplies. The vital importance of energy security in general, and the stability of crude oil prices, petroleum, and natural gas prices to the EU and other Western countries in particular was demonstrated by the first oil shock of 1973. The oil crisis of 1973 was a new experience for EU consumers, governments, as well as businesses; after all it was when crude oil prices increased by 400 per cent, to more than $6 a barrel. Whilst the economies of Western Europe, the US and Japan were adversely affected by the OPEC production cuts.
The oil price shock was primarily caused by the decisions of the Organization of Petroleum Exporting Countries (OPEC) to cut levels of crude oil production in response to certain or specific events such as perceived Western support for Israel during the Yom Kippur War of October 1973. Energy security can also be effected by fears that crude oil production and shipment will be harmed by events that destabilise the Middle East such as the Iranian Revolution and more recently prior to and then within the wake of the US – led invasion of Iraq in 2003. Without doubt the period of higher crude oil and natural gas prices in the global economic system were beneficial for Russian energy companies and producers as much as it was disadvantageous for the businesses and consumers within the EU member states.
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