What is the history of the price of crude oil?


Quick Answer

Crude oil prices have fluctuated from highs of approximately $120 per barrel in inflation-adjusted 2013 dollars to lows of just over $10 since the mid-1800s. The first major spike occurred in 1862 during the U.S. Civil War, which drove prices from under $20 to $120.

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Full Answer

Throughout much of the remaining 1800s, crude oil prices varied between $20 and $80 during a boom-and-bust cycle of procurement. A recession and increased global production caused dramatic price falls between 1890 and 1892. However, major U.S. oilfields in Pennsylvania began to dry up simultaneously, and prices shot up in 1985. In the early 1920s, widespread automobile usage created the West Coast Gasoline Famine, bringing prices up to the high $30s. Prices plummeted during the Great Depression, however, which wiped out demand for fuel.

In 1956, the Suez Crises blocked off much of the world's oil from the Middle East, but prices remained relatively flat as other countries ramped up production. Prices increased to almost $60 in 1973 when Arab countries refused to trade with Israeli supporters during the Yom Kippur War. The Iranian revolution in 1978 saw the country cut much of its oil production as it ended U.S. ties, pushing prices as high as $100. Massive supply increases pushed prices down in the mid-1980s. However, increased Asian demand, limited investment in new oil sources and conflict in the Middle East sent prices up to $100 in the early 2000s. Prices fell in 2008 as a result of a global recession but recovered amidst the Arab Spring in 2011. With weak demand and excess production, prices fell again in 2014.

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