That is the lesson to be learned from the 1970s. That is no surprise. If govern- ments let oil prices rise, people cut down on marginal uses of oil but continue to use it where it is most valuable. They take fewer trips to stores and fewer driving vacations, for example, but continue to drive to work. People insulate their houses and close off unused rooms.
Airlines drop marginal flights.
Utilities switch from oil to coal and natural gas when oil becomes too expensive. In 1973, the last year of low oil prices, utilities in the United States used 3.515 quadrillion Btu of oil. The market works. Of course, Saddam does not have to create gasoline lines to hurt us. Simply by raising the price of oil, a good we import in large quantities, he can hurt the U.S. economy.