1979 energy crisis

DEFINITION of '1979 energy crisis'

The 1979 energy crisis in the U.S. was an event of widespread panic about potential gasoline shortages that occurred when oil production decreased in the aftermath of the Iranian Revolution. Although oil output only decreased by around 4% worldwide, the panic drove up oil prices far higher than the decrease justified, and caused long lines at gas stations. (For related reading, see: Possible Effects of an Iran Embargo.)

BREAKING DOWN '1979 energy crisis'

The oil crisis affected oil-consuming regions of the U.S. differently than it did the oil-producing regions. It also resulted in government initiatives aimed at reducing the dependence on fossil fuels, such as the formation of the Synthetic Fuels Corporation. (For related reading, see: What We Learned from the Last Oil Shock.)