This day in history in 1978 the American Embassy in Teheran was stormed. There was an ongoing revolution in the country and this had led to the fall of the Shah of Iran. The Shah had been the absolute ruler of the country for several decades. He had adopted a pro-American stance. However, in 1978 there were widespread demonstrations against his increasingly pro-western stance and his repression of personal and religious liberties. The revolution increasingly came under the control of Islamic fundamentalists especially after the Shah fled. The Americans were widely reviled in Iran as they were seen as the main supporters of the hated Shah and for their interference in Iranian affairs.
This led supporters of the Ayatollah Khomeini to storm the American embassy on this date in 1979. On this day in 1979, several hundred Iranian students enter the embassy without any opposition from the local police. The students take over 60 Americans hostage. The students demanded the return of the Shah who was now in exile in Egypt where he was receiving treatment for cancer. The American public was outraged and President Carter announced a series of sanctions against Iran. The Carter administration announced an embargo on Iranian oil, this was aimed at forcing the students and their backers to release the hostages.
This was a controversial decision as at the time, there was an energy crisis in America and the rest of the western world. OPEC, the Organization of Petroleum Exporting Countries (OPEC) cartel had unilaterally raised the price of a barrel of oil to an all-time high. Even before the Carter administration had announced the embargo the American public was struggling with the effects of a price rise. The embargo made the crisis even worse. There were long lines of cars at gas stations all over the country and frequent fights as people sought to get gas for their cars.
The oil crisis was to have a negative impact on the American car industry as they were all gas-guzzlers that used a large amount of gas. The more energy efficient Japanese car industry took advantage of the crisis and they gained a great deal of market-share.
In April 1980, President Carter broke all diplomatic relations with the Iranian government. He later ordered a rescue mission designed to free the 60 hostages. This mission failed and it resulted in the deaths of some Air personal in the deserts of Iran when helicopters collided. The Carter administration entered into negotiations with the Iranian government, which by now was under the control of Ayatollah Khomeini, who had established an Islamic State in Iran. After months of negotiations, the American hostages were finally released. The hostage crisis arguably greatly contributed to the defeat of Carter in the 1980 Presidential election. American and Iranian diplomatic relations have still not been normalized, even over thirty years after the hostage crisis