Are we slowly headed towards an energy crisis as bad as the oil embargo of the '70s? This post on CalculatedRisk has an interesting chart that should give you pause. It graphs oil as a percent of GDP which should abstract out some inflationary effects, and the chart seems to follow the same trend as this one from Wikipedia, but with a smoothing function that hides small-scale changes (such as our recent spikes of >$80/barrel).
The chart shows very similar shifts from 1973-1974 as we see in 2004-2005, although the history is obviously different. From Wikipedia:
A few months later, the crisis eased. The embargo was lifted in March 1974 after negotiations at the Washington Oil Summit, but the effects of the energy crisis lingered on throughout the 1970s. The price of energy continued increasing in the following year, amid the weakening competitive position of the dollar in world markets; and no single factor did more to produce the soaring price inflation of the 1970s in the United States. [emphasis mine]Prices spiked again in 1980 when political uncertainty rocked the region:
OPEC-member states in the developing world withheld the prospect of nationalization of the companies' holdings in their countries. Most notably, the Saudis acquired operating control of Aramco, fully nationalizing it in 1980 under the leadership of Ahmed Zaki Yamani. As other OPEC nations followed suit, the cartel's income soared.Nationalizing an entire industry is not something that sits well with US investors (or politicians). But are we starting to see a pattern? What is coming if history repeats itself does not bode well for the US, and we're exacerbating the few strained relationships we still have by our actions in the Middle East and South America. Unfortunately this time it seems we won't notice the pain until it's too late thanks to willful blindness such as this.