ABSTRACT
A low-cost energy source, oil, encouraged rapid development of market economies during the 1950s, 1960s, and early 1970s. Oil competes with other fuels such as natural gas, coal, and electricity in industrial uses so that cheap oil places a ceiling on prices of other fuels as well. World War II illustrated oil's importance as a factor in helping Allied forces defeat Axis powers. The US government, because of concern about its relative lack of oil reserves, attempted to purchase the Socal-Texaco Saudi Arabia concession in 1943 as well as concessions held by other oil companies. Oil companies did their job so well that it resulted in Middle East oil producers forming the organization of petroleum companies in 1960. The United States through building blocs—Marshall Plan, open-door trade policy, a military umbrella, and tax policy—encouraged rapid economic growth and rising incomes in market economies. This encouraged oil use in manufacturing processes and in products produced.
