Crude Oil History

Oil has been used and known since a long time even at the time of Bible also it was mentioned as construction cement. History of oil has changed remarkably after the invention of automobile as the oil consumption changed drastically. In the mid-19th century the oil era began in northwest Pennsylvania, because the shallow fields were tapped.

The crude oil history had characteristic boom and bust, after the new discoveries overwhelmed the demands and when the demands increased considerably the discoveries lagged behind it. The prices of oil fell from $10 a barrel in January 1861 to 10 cents a barrel in December 1861, but again became high up to $7.25 a barrel in September 1863 and then down to $2.40 in 1867. The oil prices history also displays the swings in the market from scarcity to oversupply. The crude oil history also shows that the price cycle of crude oil range from a small duration to several years.

The major events in the history of oil can be as follows:

Oil prices remained stable at around $3 from 1948 to 1970, after that OPEC was formed in 1960 which consists of countries like Saudi Arabia, Kuwait, Iraq, Iran and Venezuela. Then came the oil crisis time, when the oil prices quadrupled from $3 in 1972 to $12 in 1974. The reason for this increase was due to Yom Kippur War, after the attack by Egypt and Syria.

Again 1979 and 1980 was the year of oil crisis because of the Iranian revolution; the oil production was dropped down drastically to 2.5 million barrels a day. And in 1980, the situation was worsened due to Iraqi invasion, and the oil prices rocketed to $35 per barrel.

In the history of oil, the years between 1980 to 1986 was the period of Oil Glut due to the overproduction, conservation and pulling down consumption of the crude oil. The oil prices fell to $10 from $35 in these years. Now, the period of Oil Spike came in 2003-2008, when the inflation adjusted the oil prices and crossed $30 in 2003, $60 in August 2005 and historically high up to $147.30 in July 2008 in the mid of the economic recession. The average crude oil rate reached to $71.21 in 2010, so we can see in the oil prices history there was so much of fluctuation due to different global economic conditions.