The oil price hikes of the 1970s came to be regarded by major oil exporters as a mistake. Of course, they reaped enormous financial gains as oil prices rose tenfold between 1973 and 1980, but over the longer term the negatives outweighed the positives. The industrial world fell into a recession and oil demand sagged. Meanwhile, high prices encouraged new sources of supply as well as conservation efforts. By the mid-1980s, crude was down from over $35 per barrel to $15 to $20. It fell to $10 by 1999, matching pre-1973 levels in inflation-adjusted dollars. By then, even Saudi Arabia began to feel financial strain.

In the 1970s, people in the Arab world came to expect that oil would not only provide great wealth but would right the balance of power vis-a-vis the West. When this failed to happen, the resultant disappointment stoked Islamic militancy. It is no accident that Saudi nationals were so prominent among Sept. 11 hijackers and masterminds.

The Moscow Times