1973/1979: Oil Crises

On October 17, 1973 the Organization of the Petroleum Exporting Countries, OPEC, drastically raised the price of crude oil and slowed production. This pricing policy measure was a reaction to the pro-Israel politics of Western industrial countries during the Yom Kippur War. The second oil price crisis was triggered in 1979/80 as a result of price increases, which were a reaction to the growing uncertainty in the major oil-producing countries in the wake of the Islamic Revolution in Iran and the ensuing first Gulf War.

If affordable oil was previously self-evident, the embargos revealed dependence on crude oil and the limits of economic growth, especially for Western Europe and the USA. While an end to a decades-long increase of prosperity had previously been announced in 1973, it was the year 1979 that finally marked an economic turning point. The crises generated, for example, a rethinking of energy supply issues in favour of nuclear energy.

In Austria, economic policy measures were taken, especially after the first oil crisis. The so-called “Austro-Keynesian Economics” under federal Chancellor Bruno Kreisky aimed to achieve full employment and stability, among other things, through government investment at the expense of the state budget.