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The past year has delivered one of the worst crashes in crude oil price history.
Crude oil prices have slumped 47% since July 2014. The oil sector hasn’t performed this poorly since the 2008 financial crisis.
Here’s an annotated breakdown of the events behind the significant oil price movements since 1862…
25 Important Events in Crude Oil Price History
Crude Oil Price History Event (A), 1862 – 1865: The American Civil War is in full swing.Crude oil demand skyrockets due to its increasing use for lamps and medicinal purposes. The commodity experiences its first production boom in Titusville, Pa. Oil becomes a cheaper alternative to heavily taxed whale oil, another illuminant with similar qualities.
Crude Oil Price History Event (B), 1865 – 1890: Prices boom and bust over the next 25 years due to fluctuations in U.S. drilling. By 1877, John D. Rockefeller’s Standard Oil Company controls more than 95% of all oil refineries in the country.
Crude Oil Price History Event (C), 1890 – 1892: The United States enters its worst recession to date, causing oil prices to plummet. The period is marked by the excessive financing of railroads, which results in a series of bank failures. Unemployment ranges from 17% to 19%.
Crude Oil Price History Event (D), 1891 – 1894: The Titusville oil fields that birthed the U.S. oil industry start to decline. This sets the stage for higher prices in 1895.
Crude Oil Price History Event (E), 1894: An international cholera outbreak draws back oil production throughout Europe, contributing to the 1895 spike.
Crude Oil Price History Event (F), 1920: The widespread adoption of the automobile drastically raises oil consumption before one of the worst events in world history sends prices to record lows…
Crude Oil Price History Event (G), 1931: The onset of the Great Depression reduces demand and sends prices sinking to $0.87 a barrel (roughly $12 a barrel today).
Crude Oil Price History Event (H), 1947: Increased spending on advertising after the war leads to a huge boost in nationwide automobile sales. The automotive boom also causes gasoline shortages in many U.S. states.
Crude Oil Price History Event (I), 1956 – 1957: Global prices remain steady due to two equalizing events. The blocked-off Suez Canal from the Suez Crisis takes 10% of the world’s oil off the market, while soaring production outside of the Middle East makes up for the absence of a major oil passageway.
Crude Oil Price History Event (J), 1972: Total U.S. production peaks near an average of 9 million barrels a day.
Crude Oil Price History Event (K), 1973 – 1974: During the Yom Kippur War, the Organization of Arab Petroleum Exporting Countries (OAPEC), which includes Egypt and Syria, imposes an oil embargo against countries supporting Israel. By the end of the embargo in March 1974, oil prices had increased from $3 a barrel ($14 a barrel today) to $12 ($58).
Crude Oil Price History Event (L), 1978 – 1979: Iran dramatically cuts production and exports during the country’s revolution.
Crude Oil Price History Event (M), 1980: The Iran-Iraq War further decreases exports from the Middle Eastern region.
Crude Oil Price History Event (N), 1980s: A worldwide supply glut sets in, sending prices from over $35 a barrel (about $100 today) down to $12 (about $28). The former U.S.S.R. and United States were the top two producers in the world by 1985, respectively churning out 11.9 million and 11.2 million barrels per day.
Crude Oil Price History Event (O), 1986: Saudi Arabia decides to regain its share of the global oil market by increasing production in the face of crashing prices. The OPEC leader went from 3.8 million barrels a day in 1985 to more than 10 million barrels a day in 1986.
Crude Oil Price History Event (P), 1988: The Iran-Iraq War ends in August, allowing both countries to start ramping up production.
Crude Oil Price History Event (Q), 1990: Iraq invades Kuwait after Saddam Hussein accuses Kuwait of stealing Iraq’s market share. The conflict involved Iraqi forces setting fire to up to 700 Kuwaiti oil wells. Kuwait cuts exports until 1994 as a result.
Crude Oil Price History Event (R), 1999: Thailand, Indonesia, and South Korea recover from the 1997 financial crisis caused by the collapse of Thailand’s baht currency. Demand starts to soar in the region.
Crude Oil Price History Event (S), Early 2000s: Prices start gaining momentum thanks to growing U.S. and world economies. They head toward their highest level since 1981.
Crude Oil Price History Event (T), 2001 – 2003: The Sept. 11 attacks and the invasion of Iraq raise concerns about the stability of the Middle East’s production.
Crude Oil Price History Event (U), Mid-2000s: The combination of declining production and surging Asian demand send prices to record highs.
Crude Oil Price History Event (V), 2008: The global financial crisis causes a bubble-bursting sell-off. Prices plummet 78.1% from July to December.
Crude Oil Price History Event (W), 2011: Riots and protests from the Arab Spring wash over the Middle East. The Libyan civil war disrupts the region’s output.
Crude Oil Price History Event (X), 2014: Strong production in the United States and Russia cause prices to crash from July to December. OPEC’s November decision to maintain production further damages the market heading into 2015.
Crude Oil Price History Event (Y), 2015: U.S. output reaches its highest level in more than 100 years. Prices hover near $50 a barrel as of July 22.
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