These companies had kept oil prices low, increasing the West's dependence on oil as a source of energy and fuelling Western prosperity. The oil crisis of the seventies prompted a world recession. Oil companies and manufacturers rushed to pass the cost on to consumers, prompting inflation, recession and high unemployment in industrialised countries. Among other things, the oil crisis prompted a three day week in the UK, as part of an ongoing effort to save energy. As well, it resulted in the death of the petrol engine in London's black cabs, many of which have now been replaced by diesel engines.
Many analysts make the link between high oil prices and global recession.
Recessions in the 1970s, the early 1980s and the early 1990s were all preceded by a rise in the oil price. During the Gulf War, prompted by Iraq's occupation of Kuwait in 1990, oil prices again shot higher, out of fear that fighting in the area would affect supply. In recent years, the US and Europe have benefited from the fall in oil prices, triggered in part by the 1997 Asia financial crisis. This allowed the US economy to grow, without a simultaneous boom in inflation. Oil may be less important to the world economy than it was in the 1970s, but in a US election year, a high oil price raises fears about inflation as well as disgruntled voters.