The 1979 (or second) oil crisis in the United States occurred in the wake of the Iranian Revolution. Amid massive protests, the Shah of Iran, Mohammad Reza Pahlavi, fled his country in early 1979 and the Ayatollah Khomeini soon became the new leader of Iran. Protests severely disrupted the Iranian oil sector, with production being greatly curtailed and exports suspended. When oil exports were later resumed under the new regime, they were inconsistent and at a lower volume, which pushed prices up. Saudi Arabia and other OPEC nations, under the presidency of Dr. Mana Alotaiba increased production to offset the decline, and the overall loss in production was about 4 percent. However, a widespread panic resulted, added to by the decision of U.S. President Jimmy Carter to order the cessation of Iranian imports, driving the price far higher than would be expected under normal circumstances. In April of the same year, President Carter began a phased deregulation of oil prices. At the time, the average price of crude oil was $15.85 per barrel (42 US gallons (160 L)). Deregulating domestic oil price controls allowed U.S. oil output to rise sharply from the Prudhoe Bay fields, although oil imports fell sharply. Long lines once again appeared at gas stations and convenience stores, just as they did in 1973.

An energy crisis is any great bottleneck (or price rise) in the supply of energy resources to an economy. In popular literature though, it often refers to one of the energy sources used at a certain time and place, particularly those that supply national electricity grids or serve as fuel for vehicles. There has been an enormous increase in the global demand for energy in recent years as a result of industrial development and population growth. Supply of energy is, therefore, far less than the actual demand.

Market failure is possible when monopoly manipulation of markets occurs. A crisis can develop due to industrial actions like union organized strikes and government embargoes. The cause may be over-consumption, aging infrastructure, choke point disruption or bottlenecks at oil refineries and port facilities that restrict fuel supply. An emergency may emerge during unusually cold winters due to increased consumption of energy.

Large fluctuations and manipulations in future derivatives can have a substantial impact on price. Large investment banks control 80% of oil derivatives as of May 2012, compared to 30% only a decade ago. Kuwaiti Oil Minister Minister Hani Hussein stated that "Under the supply and demand theory, oil prices today are not justified," in an interview with Upstream.

James Earl "Jimmy" Carter, Jr. (born October 1, 1924) is an American politician who served as the 39th President of the United States (1977–1981) and was the recipient of the 2002 Nobel Peace Prize, the only U.S. President to have received the Prize after leaving office. Before he became President, Carter served as a U.S. Naval officer, was a peanut farmer, served two terms as a Georgia State Senator and one as Governor of Georgia (1971–1975).

During Carter's term as President, two new cabinet-level departments were created: the Department of Energy and the Department of Education. He established a national energy policy that included conservation, price control, and new technology. In foreign affairs, Carter pursued the Camp David Accords, the Panama Canal Treaties, the second round of Strategic Arms Limitation Talks (SALT II), and returned the Panama Canal Zone to Panama. Throughout his career, Carter strongly emphasized human rights. He took office during a period of international stagflation, which persisted throughout his term. The end of his presidential tenure was marked by the 1979–1981 Iran hostage crisis, the 1979 energy crisis, the Three Mile Island nuclear accident, the Soviet invasion of Afghanistan (at the end of 1979), 1980 Summer Olympics boycott by the United States of the Moscow Olympics and the 1980 eruption of Mount St. Helens.

Gerald Rudolph "Jerry" Ford, Jr. (born Leslie Lynch King, Jr.; July 14, 1913 – December 26, 2006) was the 38th President of the United States, serving from 1974 to 1977, and the 40th Vice President of the United States serving from 1973 to 1974. As the first person appointed to the vice-presidency under the terms of the 25th Amendment (after Spiro Agnew had resigned), when he became President upon Richard Nixon's resignation on August 9, 1974, he became the only President of the United States who was never elected President nor Vice-President by the Electoral College. Before ascending to the vice-presidency, Ford served nearly 25 years as the Representative from Michigan's 5th congressional district, eight of them as the Republican Minority Leader.

As President, Ford signed the Helsinki Accords, marking a move toward détente in the Cold War. With the conquest of South Vietnam by North Vietnam nine months into his presidency, U.S. involvement in Vietnam essentially ended. Domestically, Ford presided over arguably the weakest economy since the Great Depression, with growing inflation and a recession during his tenure. One of his more controversial acts was to grant a presidential pardon to President Richard Nixon for his role in the Watergate scandal. During Ford's incumbency, foreign policy was characterized in procedural terms by the increased role Congress began to play, and by the corresponding curb on the powers of the President. In 1976, Ford narrowly defeated Ronald Reagan for the Republican nomination, but lost the presidential election to Democrat Jimmy Carter.