The Big Crash: The world's major oil producers quadruppled oil prices and announced on October 17 that they would no longer ship oil to the United States, its allies in the Western Europe, and Japan. This was partly payback for the US support of Israel in the 1973 Yom Kippur War against Syria, Egypt and Iraq.
The surge in oil prices fed into all others of the economy, causing a jump in inflation and exacerbating a recession that was starting in the US. This led to the first instance of stagflation, which is when people are out of jobs but prices are stubbornly high - pretty much the worst thing that can happen to an economy.
Recovery: Oil prices finally stablised in the late 1970s, only to rise to a new peak when war broke out between Iraq and Iran in 1981. But prices declined gradually again after that.
Why it's Important: The Oil Shock of 1973 is brought up as a warning economic fable everytime oil prices shoot up to a new records.
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