What did the OPEC oil embargo primarily contribute to in terms of American economy?

The OPEC oil embargo, enacted in 1973, primarily led to escalated inflation rates in the American economy. When OPEC decided to restrict oil exports to the United States and other nations supporting Israel during the Yom Kippur War, it resulted in a dramatic increase in oil prices. This sudden spike in energy costs affected numerous sectors of the economy, driving up transportation costs and the prices of goods and services. As businesses passed on these increased costs to consumers, inflation surged, leading to a period known as "stagflation," characterized by stagnant economic growth coupled with high inflation and unemployment.

The embargo also highlighted the United States’ heavy reliance on foreign oil, prompting discussions about energy security and the need for greater energy independence. This context laid the groundwork for future policy shifts, including the promotion of alternative energy sources, but the immediate effect of the embargo was a significant rise in inflation, making it the most relevant outcome in this scenario.