How Has the Price of Crude Oil Impacted History?


Quick Answer

Historically, the price of crude oil affects several aspects of peoples' lives, including frequency and extent of travel, use of heating during the winter and calculations of household budgets. Crude oil acts as the primary ingredient in many products, which the U.S. Energy Information Administration (EIA) lists as gasoline for cars and fuel for airplanes, heating oil and lubricants. Fluctuation in price determines consumer consumption of these products; high prices might make people drive and fly less frequently or restrict their travel to closer destinations, and reduce their use of heat during the winter.

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How Has the Price of Crude Oil Impacted History?
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Full Answer

The price of oil impacts behavior on local, national and even international scales. When crude oil prices rise, consumers rethink their spending habits. They might consider crude oil products commodity items, and restructure their budget to reduce consumption of those products. A rise in oil prices also affects production, as companies must reconsider how to allocate resources. Price of oil also plays a role in diplomatic relations. When prices of crude oil from specific countries rise, consumers feel the effects. National leaders might pursue diplomatic or even military action to receive greater oil supplies and drive down costs.

Several factors contribute to the fluctuating price of crude oil, including political events, geographical location and even weather patterns. Events slowing the supply of oil typically raise prices, say researchers at the EIA. These events include hurricanes, economic recessions and wars.

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