THE UNITED STATES experienced the second petroleum crisis of the decade in 1979. American consumers were told that the cause of the crisis was a decline in Iranian oil production from 5.8 million barrels a day (mmbd) in July 1978 to 445,000 barrels a day (mbd) in January 1979. The short-run consequences of the crisis were shortages of diesel fuel and gasoline during the months of May, June, and July. At the peak of the crisis the gasoline lines were as long as or longer than those in 1974. There were also suggestions that heating oil would be in short supply in the 1979-80 winter. The long-run consequences are higher prices of gasoline, heating oil, residual fuel oil and, eventually, higher prices of all products derived from petroleum.
