The oil shocks of the 1970s, initiated by the first Arab oil embargo in 1973, stunned the industrialized world. The Organization of Petroleum Exporting Countries (OPEC) controlled a resource that was vital to the national well-being and national security of America and its allies. In the United States, gas lines formed as Americans waited for increasingly costly and scarce fuel. Europeans realized that the energy shortages, which they originally believed to be short-term, might permanently change their lives. This dissertation places the historical debate about the effectiveness of domestic and foreign energy policy within the framework of the global transformations taking place at the end of the twentieth century. The collapse of the Bretton Woods system in 1971 and the advent of petrodollars on world currency markets, the emergence of the Soviet Union as an oil exporter, the rise of OPEC as a regulator of oil prices and the consequent decline in the power of the seven major multinational oil companies, and the growth of a global environmental movement, all contributed to the shifting interplay of forces confronting the United States and its allies in the late twentieth century and shaped the debate over national and international energy policy. America's efforts to work with its allies to develop a cohesive national and international energy policy fell victim to the struggle between political autonomy and interdependence in an era of globalization. The allied response to the Iranian hostage crisis and the Soviet invasion of Afghanistan highlighted these conflicts within the alliance.

During the 2008 spike in oil prices, oil companies and government officials were brought under close scrutiny as many Americans began to question why prices were able to rise so quickly. Americans had become accustomed to living in an economy where cheap oil was the norm, and demanded answers when that situation changed. What most of them did not know is that they were repeating history and mimicking the response to the 1973 oil embargo. Just as in 2008, the United States faced a crisis in 1973 with which it was unprepared to effectively cope. This thesis analyzes the reasons for and consequences of this lack of preparation in 1973 drawing on the writings of major policy makers and leaders of the time, most notably Henry Kissinger, Anwar el-Sadat, and Richard Nixon, Senate hearings testimony, recently declassified government documents detailing plans for U.S. invasion, and contemporary newspapers which recorded public perception. I argue that decades of living with cheaply priced oil, an over reliance on multinational corporations and a lack of understanding of Middle Eastern resentment toward these oil companies, combined with a fundamental misunderstanding of how oil and politics could be linked brought the United States to the ultimate near-decision of invading the Middle East. The 1973 oil embargo brought the United States face-to-face with the consequences of reliance on foreign oil and with the hardships that resulted from it. The United States had relied on oil companies to manage their interests in the Middle East for decades but in 1973 the situation changed forever. I close by considering the ongoing deep ties between the United States and the Middle East that are present still. The same problems that existed in 1973 exist today, and until those are corrected the United States and its economy will be deeply tied to the Middle East and to events in the region.

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