Oil Prices during the 1973 Yom Kippur war
The solid line in the attached figure shows crude oil prices in US dollar per barrel. These are nominal prices from 1973-1975 - the actual dollar amounts paid at that time, not adjusted for inflation. By the way , If these prices were adjusted to 2025 dollars, they would be much higher. For example, the ~$12 per barrel price in 1974 would be equivalent to roughly $75-80 per barrel in 2025 dollars after accounting for inflation over the past 50+ years. The chart shows the dramatic price shock in its historical context - oil going from $4-5 to $15.50 per barrel was a massive jump at the time, even though those numbers seem relatively small by today's standards. The chart illustrates the 1973 oil crisis triggered by the Yom Kippur War. The Yom Kippur War began on October 6, 1973, when Egypt and Syria launched a coordinated surprise attack on Israel during Yom Kippur, catching Israeli forces off guard and making territorial gains. However, Israel with the help of the USA eventually made a successful counteroffensive, pushing back Syrian forces and crossing the Suez Canal into Egypt. In response to American aid to Israel, OAPEC (Organization of Arab Petroleum Exporting Countries) imposed an oil embargo on the US and other Western supporters of Israel, while simultaneously cutting oil production. This oil embargo was announced in mid-October 1973, and continued until March 1974 (about 5 months total). The United Nations managed to achieve a ceasefire which ended the war after about 3 weeks. So the war duration was between October 6-25, 1973 (about 20 days). Oil prices roughly tripled in just a few months: a) Pre-war (October 1973): ~$4-5 per barrel b) Post-embargo (January 1974): ~$15.50 per barrel Prices increased sharply between October 1973 and January 1974. They then declined in steps to around $13, then $12. Prices stabilized at roughly $11-12 per barrel through late 1975 However: prices never returned to pre-war levels! So, while the war itself was brief (about 20 days), the economic impact was prolonged.