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54 Build Your Own Electric VehicleFi g u r e 3-10 The oil embargo—not fun at all!end of December. While loss of this supply was partially offset by other suppliers withinOPEC, burgeoning TV-network coverage, simultaneously broadcast throughout theworld, of the Shah’s mid-January 1979 departure and the Ayatollah Khomeini’s arrival(along with other internal Iranian events) convinced the world that Iran would neverreturn to its pro-Western ways, and initiated a 1973-style hoarding and panic buyingspree. What started as a 2 million barrel per day shortfall became 5 million barrels perday as governments, oil companies, and consumers scrambled for supplies. Hoardingat all levels exacerbated the problem, gas lines appeared again, and oil prices went from$13 to $34 a barrel (see Figure 3-10).Although Iranian exports returned to the market by March 1979, the ill-timed ThreeMile Island nuclear accident of March 28, 1979 further intensified the panic surroundingenergy awareness, in addition to forever altering public opinion on nuclear power.Several other factors contributed to making the gasoline crisis that occurred during1979 in most industrialized nations of the free world more severe than any previouscrisis. Many refineries set up to process light Iranian crude could not deliver as muchgasoline from the alternate heavier crude oil they were forced to accommodate.Uncooperative (and in some cases, conflicting) policies by federal, state, and localgovernments and oil companies disrupted the orderly distribution of the gasolinesupplies that were available. The appearance of oil commodity traders, who couldmake huge profits on the play between the long-term contract and spot prices for oil,artificially bid up the price of spot oil in response to the prevailing buy-all-you-can-getat-any-pricementality. Lengthy gasoline lines and rationing interfered with all levels ofbusiness and personal life. By the time the Iran hostage crisis began, a state of anarchyexisted in the world oil market that President Carter’s subsequent embargo of Iranianoil and freeze on Iranian assets did little to ease.The “third shock” occurred in the opposite direction—prices went down. The selfcorrectingmarket forces that swing into action after any shortage or glut accomplishedwhat the world leadership could not, this time with a vengeance. At the OPEC meeting ofJune 1980, the “official” price averaged $32 per barrel, but OPEC inventories were high,and approaching economic recession caused price and demand to fall in consuming