Price of oil

This article is about the price of crude oil. For information about derivative motor fuels, see gasoline and diesel usage and pricing. For detailed history of price movements since 2003, see World oil market chronology from 2003.

  West Texas Intermediate
  Brent Crude
  Urals oil (Russian export mix)
  Dubai Crude
  OPEC Reference Basket
Oil traders, Houston, 2009
Nominal price of oil from 1861 to 2020 from Our World in Data

The price of oil, or the oil price, generally refers to the spot price of a barrel (159 litres) of benchmark crude oil—a reference price for buyers and sellers of crude oil such as West Texas Intermediate (WTI), Brent Crude, Dubai Crude, OPEC Reference Basket, Tapis crude, Bonny Light, Urals oil, Isthmus, and Western Canadian Select (WCS).[1][2] Oil prices are determined by global supply and demand, rather than any country's domestic production level.

The global price of crude oil was relatively consistent in the nineteenth century and early twentieth century.[3] This changed in the 1970s, with a significant increase in the price of oil globally.[3] There have been a number of structural drivers of global oil prices historically, including oil supply, demand, and storage shocks, and shocks to global economic growth affecting oil prices.[4] Notable events driving significant price fluctuations include the 1973 OPEC oil embargo targeting nations that had supported Israel during the Yom Kippur War,[5]: 329  resulting in the 1973 oil crisis, the Iranian Revolution in the 1979 oil crisis, the financial crisis of 2007–2008, and the more recent 2013 oil supply glut that led to the "largest oil price declines in modern history" in 2014 to 2016. The 70% decline in global oil prices was "one of the three biggest declines since World War II, and the longest lasting since the supply-driven collapse of 1986."[6] By 2015, the United States had become the third-largest producer of oil and resumed exporting oil upon repeal of its 40-year export ban.[7][8][9]

The 2020 Russia–Saudi Arabia oil price war resulted in a 65% decline in global oil prices at the beginning of the COVID-19 pandemic.[10][11] In 2021, the record-high energy prices were driven by a global surge in demand as the world recovered from the COVID-19 recession.[12][13][14] By December 2021, an unexpected rebound in the demand for oil from United States, China and India, coupled with U.S. shale industry investors' "demands to hold the line on spending", has contributed to "tight" oil inventories globally.[15] On 18 January 2022, as the price of Brent crude oil reached its highest since 2014—$88, concerns were raised about the rising cost of gasoline—which hit a record high in the United Kingdom.[16]

  1. ^ "International Crude Oil Market Handbook", Energy Intelligence Group, 2011
  2. ^ "Pricing Differences Among Various Types of Crude Oil". EIA. Archived from the original on 13 November 2010. Retrieved 17 February 2008.
  3. ^ a b Cite error: The named reference WID_Ritchie_20171002 was invoked but never defined (see the help page).
  4. ^ Cite error: The named reference BoC 2019 was invoked but never defined (see the help page).
  5. ^ Smith, Charles D. (2006). Palestine and the Arab–Israeli Conflict. New York: Bedford.
  6. ^ Stocker, Marc; Baffes, John; Vorisek, Dana (18 January 2018). "What triggered the oil price plunge of 2014-2016 and why it failed to deliver an economic impetus in eight charts". Retrieved 19 January 2022.
  7. ^ "The World Factbook". Central Intelligence Agency. 2015. Archived from the original on 11 November 2020. Retrieved 19 January 2022.
  8. ^ Christian Berthelsen; Lynn Cook (24 June 2014). "U.S. Ruling Loosens Four-Decade Ban On Oil Exports". The Wall Street Journal.
  9. ^ Amy Harder; Christian Berthelsen (20 December 2015). "End of Oil-Export Ban Provides Blueprint for Bipartisan Compromise". The Wall Street Journal.
  10. ^ Jacobs, Trent. "OPEC+ Moves to End Price War With 10 Million B/D Cut". pubs.spe.org. Journal of Petroleum Technology. Archived from the original on 10 April 2020. Retrieved 10 April 2020. (early March) In the ensuing weeks West Texas Intermediate (WTI) prices fell to a low of around $20, marking a record 65% quarterly drop
  11. ^ "The impact of coronavirus (COVID-19) and the global oil price shock on the fiscal position of oil-exporting developing countries". OECD. 30 September 2020. Retrieved 19 January 2022.
  12. ^ "Energy crunch: How high will oil prices climb?". Al-Jazeera. 27 September 2021.
  13. ^ "Oil analysts predict a prolonged rally as OPEC resists calls to ramp up supply". CNBC. 5 October 2021.
  14. ^ "Column: Oil prices expected to rise with big variation in projections: Kemp". Reuters. 19 January 2022.
  15. ^ Kelly, Stephanie; Sharafedin, Bozorgmehr; Samanta, Koustav (23 December 2021). "Global oil's comeback year presages more strength in 2022". Reuters. Retrieved 19 January 2022.
  16. ^ Elliott, Larry (18 January 2022). "New UK cost of living threat as oil rises to highest price in seven years". The Guardian. ISSN 0261-3077. Retrieved 19 January 2022.