Oil boom bust cycle pg 571 572 pg 585
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Oil « Boom & Bust » Cycle Pg. 571-572 Pg. 585. Turnmoil and Progress. Oil Economics. A group of foreign nations created an association to limit competition called the Oragnization of Petroleum Exporting Countries (OPEC)

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Turnmoil and Progress

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Oil boom bust cycle pg 571 572 pg 585

Oil « Boom & Bust » Cycle

Pg. 571-572

Pg. 585

Turnmoil and Progress


Oil economics

Oil Economics

  • A group of foreign nations created an association to limit competition called the Oragnization of Petroleum Exporting Countries (OPEC)

  • In 1973 the Arab nations that supplied much of the oil ended shipments to the U.S. because of the U.S. Support of Israel.

  • The result an « energy crisis ». The price of oil and gasoline rose dramtically.


Oil economics1

Oil Economics

  • Motorists could buy only 3 days a week.

  • High gas prices stimulated the drilling of more oil wells and increased activity in other areas of the oil industry.

  • High oil prices lasted into the 1980’s.


Oil crisis 1973

Oil Crisis 1973


Boom and bust oil cycle

Boom and Bust Oil Cycle

  • High oil prices in the 1970s meant that the petorleum industry boomed.

  • Drilling compaines, pipe manufacturers, and oil well service compaines all shared in the resulting prosperity.

  • People moved to Texas in large numbers to find employment.

    • As often happens, « bust » followed « boom ».

  • Economic hardship gave way to hard times.


Boom and bust oil cycle1

Boom and Bust Oil Cycle

  • The weakening of the OPEC assocation and overproduction of oil lowered the price of oil.

  • Compaines cut back on drilling and fired employees.

  • Many people could not pay loans and Texas’s banks lost 3.7 billion dollars.


Persian gulf war

Persian Gulf War

  • In 1990 Iraq invaded its oil-rich neighbor, Kuwait.

  • Iraq seemed to desire the oil of both Kuwait and Saudi Arabia.

  • In 1991 President George H.W. Bush assembled troops to drive Iraq out of Kuwait and protect the oil reserves of the region.

  • This operation was known as Desert Storm.

  • The Gulf War lasted slightly over a month.


Summary

Summary

  • Define the “Boom- and Bust” cycle.

  • Trace the impact of the “boom-and bust” cycle in the oil industry.


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