During the mid-1970's, we experienced an energy crisis which more than quadrupled the price of oil in the U.S. The outrageous oil prices resulted in long lines at the gas pump, increases in airline tickets, and steep increases in all goods that were deliverable. There are several reasons as to why the increase occurred, but none are more relevant than the creation of OPEC. The main reason for the quadrupling of prices was due to the monopoly created by OPEC. OPEC(Organization of the Petroleum Exporting Countries) is an international organization of eleven developing countries that depend on their revenues from oil exports as their primary source of income. OPEC's eleven members supplied about 40 percent of the world's oil output and now have more than 3/4 of the world's total proven crude oil reserves. Thus, the oil revenues created through OPEC are essentially how these countries survive on a day to day basis. The officials from each country meet a couple of times a year to determine if the prices of oil per barrel need to be adjusted. So there is nobody telling them to set oil prices at a certain level, and there is nowhere to get oil in a mass quantity at that price. So they can do what they want at whatever price they want essentially creating a monopoly.
             There are several things which impacted the world's oil market from the energy crisis. First, the price of oil per barrel was around $15 which was back to where it originally was before the oil crisis. OPEC's share of world oil production was significantly down from its all-time high in the 1970's indicating that OPEC's monopoly was not as overwhelming as it once was. Also, the U.S.'s per capita consumption was below what it once was in 1973 showing that supply and demand can adapt to unfavorable conditions. They had also learned that self-sufficiency was no longer a realistic option because our domestic prices weren't high enough. The domestic prices are determined by World p...