Vince Dhimos answered a question at Quora.
Q: WAS THE INTERNATIONAL OIL CRISIS OF 1973 THE BEGINNING OF THE DOWNWARD SPIRAL OF OUR SOCIETIES SINCE THAT PERIOD?
Where anything starts is a philosophical question without a clear answer.
But to keep things simple, there were several major events in the 70s that put the US on the track it is on today, with its endless wars and unayable debt and the responses to them all involved President Richard Nixon.
Firstly, in 1969, US oil production could no longer keep pace with demand and the US became dependent on Middle East oil. This caused reverberations that persist to the present day. For instance, in Trump’s precipitous rush to make the US energy-independent for fear of another oil crisis like the one in the 70s, in a gamble that, while making the US apparently energy independent, heavy investments in the inherently unprofitable shale energy (which requires expensive fracking) have led to the bankruptcy of investors in shale oil (and gas). The shale rush is thus a Pyrrhic victory in a sense. It would have been infinitely wiser to wait several years until oil became scarce enough to raise world oil prices to a profitable level. By rushing into the shale oil extraction early, the reserves are being depleted now at a time of cheap oil and low profits. Thus efforts are being squandered to artificially “make America great” for political purposes instead of judiciously waiting for a time of scarcity when the shale energy would be urgently needed. This is hurting the US economy by encouraging unprofitable investment and creating jobs that probably won’t last. I wrote about this before at NSS.
Secondly, in 1971, in an unrelated event, Nixon took the US off the gold standard. He more or less was obliged to do this because the US was running low on gold and it was no longer possible to hand out gold like candy — at the bargain basement price of $35/ oz. – to parties with large amounts of “gold certificates” (US dollars).
Thirdly, very unfortunately, as though by a devilish conspiracy, since the US had taken the Israeli side in the Yom Kippur War of 1973, the Arab countries who lost that war decided to get revenge, and they undertook to make oil scarce and hence expensive for the US and its allies by launching an oil embargo. This embargo had repercussions throughout the 70s, causing severe inflation.
Fourthly, in a desperate attempt to put an end to this crisis, President Nixon sent a delegation led by his secretary of state Henry Kissinger to Saudi Arabia in 1973 to negotiate an end to the oil embargo with King Faisal. The New York Times gave insight into these talks. Eventually, an agreement was reached (in 1974) that seriously affected US foreign and military policy. The Saudis were given an attractive offer that did in fact end the oil crisis, but it gradually led to destabilization of the Middle East. In return for the Saudis’ agreeing to charge only US dollars in the settlement of their oil sales and to keep all their reserves in US dollars as well, the US side agreed to a risky offer: to use the US armed forces to defend and protect the Saudi royal family and their oil fields. There were major problems with this deal which is why it was not mentioned frequently in the media (it was not until Bloomfield used a freedom of information suit that the text of the agreement became public decades later). One problem was that according to the Constitution, the US armed forces were to be used to “provide for the common defence,” ie, to “suppress insurrections” and “repel invasions.” The petrodollar agreement, however, assigned an unconstitutional role to the US military, making it a de facto mercenary force.
Thus a second problem was the risk of potential blackmail on the part of the Saudis. I explained the risks and consequences of this arrangement here at Quora. Long story short, the Saudis did indeed seem to exert an untoward influence on the US, whether overtly or through overzealousness of US officials, to the extent that every war waged in the Middle East and Afghanistan was clearly in the interests of the Saudis (but also of Israel) and could arguably be attributed in part to an over-fulfilment of the petrodollar agreement. The upshot of these wars was chaos in the Middle East, including hundreds of thousands of deaths and injuries, a major increase in US debt, and a gradual loss of trust in the US among the people of the region. The current Iran crisis is due in part to this agreement because the Sunni Wahhabist Saudis are bitterly opposed to all Shiite influences (in Syria, headed by the Shiite-Alawite Basher al-Assad; in Shiite-majority Iraq, in Lebanon with its strong Iran-backed Hezbollah influence, and in Shiite-majority Iran). To claim that the Iraq War, the Syrian conflict – involving Wahhabist Saudi-backed ISIS and Al-Qaeda, which the US only pretended to fight, were unrelated to the US commitment to support Saudi under the petrodollar agreement, is to naively suspend disbelief. But not to forget that the Israeli influence was symbiotic with this.
Thus, from the above brief synopsis, it is clear that the oil crisis did indeed spawn, if only indirectly, a series of deleterious influences that caused attrition of the US economy and power in various ways.
It also led to a rise in Russian influence in the Middle East thanks to the entry of Russia in the Syrian war. But the Russian influence may be the only thing that saves the US from itself in the long run.