Until 1973, an abundance of oil supply had kept the market price of oil lower than the posted price. Between 19 US imports of crude oil had nearly doubled, reaching 6.2 million barrels per day in 1973. In 1973, Nixon announced the end of the quota system. Nixon imposed a price ceiling on oil in 1971 as demand for oil was increasing and production was declining, which increased dependence on foreign oil imports as consumption was bolstered by low prices.
Shultz's committee recommended that the quotas be abolished and replaced with tariffs but Nixon decided to keep the quotas due to vigorous political opposition. When Richard Nixon became president in 1969, he assigned George Shultz to head a committee to review the Eisenhower-era quota program. Some scholars believe the policy contributed to the decline of domestic US oil production in the early 1970s. Critics called it the "drain America first" policy. Eisenhower imposed quotas on foreign oil that would stay in place between 19. In 1973, US production had declined to 16% of global output. Because of transportation costs and tariffs, it never purchased much oil from the Middle East. was importing 350 million barrels (56 million cubic metres) per year by the late 1950s, mostly from Venezuela and Canada. 4.7 Conservation and reduction in demandīy 1969, American domestic output of oil was peaking and could not keep pace with increasing demand from vehicles.