ember 1973, and a temporary embargo was placed on the United States and the Netherlands simultaneously. "Other price increases followed in 1975, 1977, 1979, and 1980, which ultimately raised the price of a barrel of crude oil in The United States from $3.00 in 1973 to $30.00 in 1980" (Glasner 107). Almost every college student has heard stories from friends or relatives about the gas crunch in the 1970’s. People waited in lines that stretched for miles, and could only get gas on certain days depending on the first letter of your last name. OPEC used the money they raised to invest in other countries, placed in foreign banks, currency markets, and to help their own economies through inner development. OPEC is also extremely interested in maximizing profits, but in such a cartel, finding a price that will maximize profits is impossible. OPEC has attempted to raise prices several times by cutting production. According to economic theory, a decrease in supply will yield higher prices. These are some of the reasons the United States must offer stability and continue to have troops in the area. They must intervene when the world’s oil and its prices are in jeopardy. Currently crude oil prices are rising due to the bombings in Saudi Arabia. "It has continued to soar, to more than $24 a barrel, up 34% from one year ago, the highest level since the 1991 Persian Gulf War" (Borenstein 49). OPEC has contributed this increase to several factors: first, the rising demand of crude oil throughout the world. Second, the tight inventories because of the belief that supplies are going to run low. Third, the current turmoil that exists in the area and fourth, the heating demands of the abnormally cold winter. These factors have already raised the prices of diesel fuel, jet fuel, and home heating oil. This is of major concern to truckers, airlines, and home heating oil companies. Because of these price increases, airline ticket prices will also ...
