Word: shock
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Dates: during 1990-1999
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...when the Middle East erupted in the October War, the world was hit with Oil Shock No. 1. Then in 1979-80, after revolution broke out in Iran and the country was invaded by Iraq, came Oil Shock No. 2. In both cases petroleum prices soared, energy shortages developed, inflation took off, and the world's economies sank into recession. Last week fears of Oil Shock No. 3 could be felt from New York City to Tokyo...
Despite the anxiety in the markets and a surge of price gouging at the pumps, experts agree that Shock No. 3 is not imminent -- unless there is further military action in the gulf. The Iraqi invasion of Kuwait should not have an appreciable impact on the world's oil supply. While there was some temporary disruption of the loading of Kuwaiti tankers last week, oil continued to flow out of the region. More important, world supply far exceeds demand...
...next year and an increase in unemployment from the current 5.5% to 7.5%. The threat would not be so great if the economy were not already teetering on the edge of recession. Says Barry Bosworth, a senior fellow at the Brookings Institution: "We could not absorb a big price shock given the fragility of the economy...
...about $9 billion, to $63 billion a year. And, unlike the Japanese, Americans tended to relax their efforts to conserve fuel once it became cheap again. At this point, economists do not expect a $3 oil hike to stunt economic growth seriously in the U.S., but even a slight shock is painful with the economy as weak as it is. Last week the government said economic growth during the second quarter slogged along at an anemic annual rate of 1.2%, prompting fears of an imminent recession...
...small neighbors with impunity. "All the Arabs in the gulf want us to help them against Iraq," says Rubin, "even if they can't say so." On the other hand, it is impossible to manage a belligerent like Saddam. America's best insurance against the tyranny of another oil shock remains what it has always been: to reduce dependency by conserving energy, even if prices do not go sky high...