Will oil markets tighten again? A survey of policies to manage possible oil supply disruptions

The effects of an oil supply disruption on the U.S. economy are analyzed along with the various policy options. Part of the analysis is based on a computerized model of the U.S. economy and the world oil market. Micro as well as macroeconomic issues are considered. The paper argues against the use of price controls and allocations and also against a disruption tariff used as a stand-alone measure. It advocates the use of some stabilizing macroeconomic measures and a temporary producer tax similar to the windfall profits tax.