The 1973 oil crisis helped drive the prolonged 1970s bear market often called the 1970s stock-market crash.
In October 1973, Arab members of OAPEC announced an oil embargo against countries viewed as supporting Israel during the Yom Kippur War. Oil prices rose sharply, creating inflationary pressure and disrupting economies dependent on imported petroleum. The shock arrived alongside recession concerns, political uncertainty, and the breakdown of the postwar monetary system.
U.S. stock prices fell heavily from their January 1973 peak to their October 1974 low. The period combined weak economic growth with rapid inflation, a difficult condition later called stagflation. Higher energy costs reduced corporate margins and household purchasing power, while rising interest rates made borrowing more expensive.
The 1973 oil crisis is sometimes confused with the second oil shock of 1979, which followed the Iranian Revolution. Both hurt markets, but the 1973 event was tied directly to the Yom Kippur War and the OAPEC embargo. The stock-market decline also had causes beyond oil, including valuation, monetary, and political pressures.