The embargo began during the end of the Yom Kippur War between the Arab states and Israel. The Arabs were frustrated by their defeat and annoyed at the Western support of monies and materials that had aided the Israelis. In response, the states of OPEC declared an oil embargo on the West. This included many of the world's largest oil producers such as Saudi Arabia, Iraq, and Kuwait.
The crisis caused oil prices to quadruple, oil shortages, as well as rising prices for gasoline (petrol), electricity, and other fuels. This resulted in an energy crisis of unprecedented proportions. In many countries, government mandates for energy conservation were enacted. The shortage mostly affected Western Europe and the United States, since other areas were not as dependent upon Middle Eastern oil. The increase in the price of oil was devastating to the Western economies leading to the crisis of stagflation. This was further exacerbated by government price controls in the United States, which limited the price of "old oil" while allowing newly discovered oil to be sold at a higher price. The rule was intended to promote oil exploration, but it resulted in a withdrawal of old oil from the market which created an artificial scarcity.
There was rationing of gas/petrol in many countries. For example, in the United States, drivers of vehicles with odd-numbered license plates were allowed to purchase gasoline for their cars on Monday, Wednesday, and Friday, while drivers of even-numbered license plates automobiles were allowed to purchase fuel on Tuesday, Thursday, and Saturdays.
The energy crisis lead to greater interest in renewable energy, especially wood heat and spurred research in solar power and wind power. It also lead to greater pressure to exploit North American oil sources, and also increased the West's dependence on coal and nuclear power based electricity as well. The crisis also lead to a revolution in auto-making, where the large automobiles of the 1950s and 1960s were replaced by far more compact and energy efficient cars. The embargo also lead to the creation of the U.S.'s Strategic Petroleum Reserve.
The embargo was eventually ended after negotiations at the Washington Conference.
In thirty year old British government documents released in January 2004, it was revealed that the United States government considered invading Saudi Arabia and Kuwait  during the crisis and seize the oil fields in those countries. According to the BBC,