Oil Is Overrated?

John Quiggin argues that "oil is no more special or critical than coal, gas or metals—let alone food":

If oil is a commodity of modest importance, why does it loom so large in the thinking of U.S. policymakers and the general public? The answer, undoubtedly is the memory of the OPEC oil embargo imposed in retaliation for U.S. support of Israel during the Yom Kippur war of 1973. This shock was followed by months of queues and rationing, and by the double-digit inflation and high unemployment of the late 1970s.

Given this sequence of events, it was easy to conclude that control over oil exports is a powerful weapon in the hands of the OPEC states, and that shocks to the supply and price of oil represent a major cause of economic crises. Neither of these conclusions was correct at the time, and any validity they once had is long gone.