Many who have long and longer term memories can still recall the Yom Kippur war of October 1973 between Israel and its Arab neighbors , the subsequent OPEC oil embargo that sent the price of oil from $ U.S. $ 3 a barrel of oil to the then staggering U.S. $ 12, and the economic turmoil that followed the series of events.
The fallout from that conflict lasted for about a decade and a half. Many will point out , with great validity and with documentatation , that the war was just a marker , indeed a marker and coincidence rather than cause and causation. The oil producers had begun to see that their product was not only in short supply and essential to the western world, and that they no longer had to kowtow to the industrialized world and the oil supply companies.
In the immediate aftermath of the oil-price sticker shock, it can not be disputed that the cost of almost everything else began to rise. Workers naturally demanded hefty pay hikes to “keep up”. Government spending spiraled out of any control.
An inflationary psychology became embedded in the economic world. It took nearly a decade of appallingly high interest rates to wrestle this devil of inflation to the ground. We have been mercifully free of such a vicious and debilitating cycle when in the late 1980/s inflation and interest rates began to recede, but there are good reasons to feel another round of rapidly rising prices. Petroleum - both crude oil , as well as oil and petroleum products - whether it be gasoline ,diesel and heating fuels as well as such basics of our economy - fertilizers and plastics.
Like it our not our economy , at present , runs on oil and the cost of this resource is now much higher than it was in the not too distant past.
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