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This Day in History December 15th: OPEC states raise oil prices
Posted by: TimothyT on: 12/16/2010 08:39 AM in [ Print ]
On December 16, 1979, the night before the Organization of Petroleum Exporting Countries' annual price-setting meeting in Caracas, two member states (Libya and Indonesia) announce plans to raise the price of their oil by $4 (Libya) and $2 (Indonesia) per barrel. (The resulting prices--$30 and $25.50 per barrel, respectively--were among the highest they had ever been.) These diplomatic maneuverings were intended to keep OPEC's "price hawks" from raising them even further; nevertheless, by the end of 1979 the cost of oil had more than doubled since the end of the previous year.
This price hike only exacerbated an energy crisis that had been going on since the beginning of 1979. An Iranian oil-field strike and the January revolution had disrupted oil supplies from that part of the Middle East, and an earlier OPEC fee increase had sent prices inching toward an all-time high. By the time the Iranian hostage crisis began in November, Americans were already dealing with the effects of this "oil shock": long lines and short tempers at gas pumps, panics over gasoline and heating oil shortages, and frustration with the inefficient, gas-guzzling vehicles manufactured by American automakers.
This price hike only exacerbated an energy crisis that had been going on since the beginning of 1979. An Iranian oil-field strike and the January revolution had disrupted oil supplies from that part of the Middle East, and an earlier OPEC fee increase had sent prices inching toward an all-time high. By the time the Iranian hostage crisis began in November, Americans were already dealing with the effects of this "oil shock": long lines and short tempers at gas pumps, panics over gasoline and heating oil shortages, and frustration with the inefficient, gas-guzzling vehicles manufactured by American automakers.
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