The embargo that showed how much depended on one supply

In October 1973, during the Yom Kippur War between Israel and Egypt and Syria, the Organization of Arab Petroleum Exporting Countries began cutting oil production. After the US announced emergency aid to Israel, they also stopped oil exports to the United States, and later to some other countries.

The price of oil rose from about $2.90 a barrel before the embargo to about $11.65 in January 1974, according to the Federal Reserve's history of the period. In the United States there were long queues at petrol stations, and many economies slid into recession with high inflation. The embargo was lifted in March 1974, but prices stayed high.

Countries responded in different ways. The US set fuel economy standards for cars and built a strategic oil reserve. Several importing countries formed the International Energy Agency in 1974, and Japan and others invested in energy efficiency and other energy sources.

The crisis exposed a risk that had built up quietly: rich economies depended heavily on cheap oil from a few suppliers, and they had little spare stock or backup. Once supplies were cut, there was no quick way to replace them. The lasting decisions were about spreading that risk: storing reserves, using less and finding other sources.

The AI angle: depending entirely on one AI tool or provider is a similar risk. If its price jumps, its rules change or it stops working, a business with no backup can stall.

The idea behind this caseLesson: Choosing a model →

1. 1List the things your work depends on that come from a single supplier.
2. 2Keep a backup option ready, and test that it actually works.
3. 3Hold some reserve, such as stock, savings or a spare tool, for sudden shortages.
4. 4Use resources efficiently, so a price rise hurts less.