what was the 1979 energy crisis 
the 1979 energy crisis the second of two oil price shocks in the 70s resulted in a widespread panic about potential gasoline shortages and far higher prices for both crude oil and refined products oil output declined by only 7 or less but the short term supply disruption led to a spike in prices panic buying and long lines at gas stations understanding the 1979 energy crisisthe 1979 energy crisis occurred in the aftermath of the iranian revolution which started in early 1978 and ended in early 1979 with the fall of shah mohammad reza pahlavi the state s monarch turmoil in iran a major petroleum exporting country caused the global supply of crude oil to decline significantly triggering noteworthy shortages and a surge in panic buying within 12 months the price per barrel of this widely used resource almost doubled to 39 50 short run disruptions in the global supply of gasoline and diesel fuel were particularly acute in the spring and early summer of 1979 several states responded by rationing gasoline including california new york pennsylvania texas and new jersey in these populous states consumers could only purchase gas every other day based on whether the last digit of their license plate numbers was even or odd the gasoline shortage also led to fears that heating oil might be in short supply through the 1979 1980 winter this prospect was especially concerning for new england states where demand for home heating oil was the highest special considerationsit would be erroneous to blame the crisis solely on the fall of the shah notably the u s faced more acute pain from the crisis than other developed countries in europe which also depended on oil from iran and other middle east countries part of the reason behind the crisis had to do with fiscal policy decisions in the u s in early 1979 the u s government regulated oil prices regulators ordered refiners to restrict the supply of gasoline in the early days of the crisis to build inventories directly contributing to higher prices at the pump another factor was unintended supply restriction after the department of energy doe decided to make a handful of large u s refiners sell crude to smaller refiners who could not find a ready supply of oil because smaller refiners had limited production capabilities the decision further delayed gasoline supply monetary policy leading up to the crisis also seemingly played a role to a degree the federal open market committee fomc was reluctant to raise target interest rates too quickly and this hesitation contributed to rising inflation late in the decade the jump in inflation was accompanied by higher prices for energy and a range of other consumer products and services benefits of the 1979 energy crisisamid the crisis politicians actively encouraged consumers to conserve energy and limit unnecessary travel in subsequent years the 1979 crisis led to the sale of more compact and subcompact vehicles in the u s these smaller vehicles had smaller engines and provided better fuel economy in addition the crisis prompted utility companies worldwide to seek out alternatives to crude oil generators including nuclear power plants and governments to spend billions on the research and development r d of other fuel sources combined these efforts resulted in daily worldwide oil consumption declining in the six years following the crisis meanwhile the organization of petroleum exporting countries opec global market share fell to 29 in 1985 down from 50 in 1979 