World Impact of Oil Price Increases
Disruptions Arising From Flow of Oil Revenues
Americans are paying more than ever before to drive their cars and heat and light their homes. Crude oil price increases decreed by the petroleum-exporting countries are a hardship to many and a nuisance to nearly all U.S. consumers. The impact of the price rise on the world economy, however, is far more serious. It has already had a spectacular effect on the international monetary system, transferring vast sums to the oil producers, disrupting the economies of industrial countries, and threatening bankruptcy in some of the poorer ones.
Oil prices have more than quadrupled over the past year. In January 1973 the posted price1 for Persian Gulf crude—the standard reference in the oil trade—was ...