What were the short-term and long-term consequences of the OPEC oil embargo?

In 1973 war erupted again between Israel and its neighbors Egypt and Syria. The conflict became known both as the Yom Kippur War because it coincided with the Jewish religious holiday of atonement, and as the Ramadan War because it occurred during the Muslim month of fasting. Armed with advanced weapons from the Soviet Union, Egyptian and Syrian armies came close to defeating Israel before the U.S. government airlifted sophisticated arms to Israel. Israel counterattacked, reaching the outskirts of both Cairo and Damascus before the fighting ended.

Arab oil-exporting countries retaliated against U.S. support for Israel by imposing an embargo on oil sales to countries that had aided Israel during the war. The embargo caused a worldwide disruption in oil supplies that had consequences around the world. The United States, western Europe, and Japan faced recession and inflation. In Latin America the oil crisis began a cycle of government borrowing from abroad that culminated in a crippling debt crisis. The embargo and changing oil prices created a boom-and-bust cycle for oil-exporting countries like Mexico and Nigeria.

Amid the oil embargo, the war in Vietnam, and political conflict within the United States, U.S. political and economic influence as a global superpower seemed to decline. The inability of the United States to defeat North Vietnam or to force a political solution to the conflict made the postwar atomic superpower seem increasingly powerless. President Richard Nixon further eroded the moral and political credibility of the U.S. government when he became enmeshed in the Watergate scandal, an illegal surveillance operation and subsequent cover-up during the 1972 presidential campaign that led to his resignation.