17
Oct
08

On This Day, 10-17-2008: OPEC

October 17, 1973

OPEC enacts oil embargo

The Arab-dominated Organization of Petroleum Exporting Countries (OPEC) announces a decision to cut oil exports to the United States and other nations that provided military aid to Israel in the Yom Kippur War of October 1973. According to OPEC, exports were to be reduced by 5 percent every month until Israel evacuated the territories occupied in the Arab-Israeli war of 1967. In December, a full oil embargo was imposed against the United States and several other countries, prompting a serious energy crisis in the United States and other nations dependent on foreign oil.

OPEC was founded in 1960 by Saudi Arabia, Iran, Iraq, Kuwait, and Venezuela with the principle objective of raising the price of oil. Other Arab nations and Third World oil producers joined in the 1960s and early 1970s. For the first decade of its existence, OPEC had little impact on the price of oil, but by the early 1970s an increase in demand and the decline of U.S. oil production gave it more clout.

In October 1973, OPEC ministers were meeting in Vienna when Egypt and Syria (non-OPEC nations) launched a joint attack on Israel. After initial losses in the so-called Yom Kippur War, Israel began beating back the Arab gains with the help of a U.S. airlift of arms and other military assistance from the Netherlands and Denmark. By October 17, the tide had turned decisively against Egypt and Syria, and OPEC decided to use oil price increases as a political weapon against Israel and its allies. Israel, as expected, refused to withdraw from the occupied territories, and the price of oil increased by 70 percent. At OPEC’s Tehran conference in December, oil prices were raised another 130 percent, and a total oil embargo was imposed on the United States, the Netherlands, and Denmark. Eventually, the price of oil quadrupled, causing a major energy crisis in the United States and Europe that included price gouging, gas shortages, and rationing.

In March 1974, the embargo against the United States was lifted after U.S. Secretary of State Henry Kissinger succeeded in negotiating a military disengagement agreement between Syria and Israel. Oil prices, however, remained considerably higher than their mid-1973 level. OPEC cut production several more times in the 1970s, and by 1980 the price of crude oil was 10 times what it had been in 1973. By the early 1980s, however, the influence of OPEC on world oil prices began to decline; Western nations were successfully exploiting alternate sources of energy such as coal and nuclear power, and large, new oil fields had been tapped in the United States and other non-OPEC oil-producing nations.

“OPEC enacts oil embargo.” 2008. The History Channel website. 17 Oct 2008, 01:05 http://www.history.com/this-day-in-history.do?action=Article&id=7053.

On This Day

1777 – American troops defeated British forces in Saratoga, NY. It was the turning point in the American Revolutionary War.

1888 – The first issue of “National Geographic Magazine” was released at newsstands.

1917 – The Radio Corporation of America (RCA) was formed.

1931 – Al Capone was convicted on income tax evasion and was sentenced to 11 years in prison. He was released in 1939.

1933 – “News-Week” appeared for the first time at newsstands. The name was later changed to “Newsweek.”

1945 – Colonel Juan Peron became the dictator of Argentina after staging a coup in Buenos Aires.

1978 – U.S. President Carter signed a bill that restored full U.S. citizenship rights to Confederate President Jefferson Davis.

2001 – Pakistan placed its armed forces on high alert because of troop movements by India in the disputed territory of Kashmir. India said that the movements were part of a normal troop rotation.

October 17, 1974

Ford explains his pardon of Nixon to Congress

On this day in 1974, President Gerald Ford explains to Congress why he had chosen to pardon his predecessor, Richard Nixon, rather than allow Congress to pursue legal action against the former president.

Congress had accused Nixon of obstruction of justice during the investigation of the Watergate scandal, which began in 1972. White House tape recordings revealed that Nixon knew about and possibly authorized the bugging of the Democratic National Committee offices, located in the Watergate Hotel in Washington D.C. Rather than be impeached and removed from office, Nixon chose to resign on August 8, 1974.

When he assumed office on August 9, 1974, Ford, referring to the Watergate scandal, announced that America’s “long national nightmare” was over. There were no historical or legal precedents to guide Ford in the matter of Nixon’s pending indictment, but after much thought, he decided to give Nixon a full pardon for all offenses against the United States in order to put the tragic and disruptive scandal behind all concerned. Ford justified this decision by claiming that a long, drawn-out trial would only have further polarized the public. Ford’s decision to pardon Nixon was condemned by many and is thought to have contributed to Ford’s failure to win the presidential election of 1976.

“Ford explains his pardon of Nixon to Congress.” 2008. The History Channel website. 17 Oct 2008, 01:03 http://www.history.com/this-day-in-history.do?action=Article&id=51396.

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