BP released its annual report on energy consumption, including a chart that shows oil prices since 1861. The effective cost of oil increased in the 1860s as well as the 1970s, correlating with major events such as the Pennsylvania oil boom and the oil embargo of 1973. Price drops closely correspond to new sources of oil, including the beginning of Russian exports. Some of the more significant events in the oil price history are the 1967 Oil Embargo, 1973 oil crisis, 1979 energy crisis, 1980s oil glut, and Oil price increase of 1990.

historical-oil-prices-since-1861

Click chart to enlarge

Significant events in oil price history:

The 1967 Oil Embargo

The 1967 Oil Embargo began on June 6, 1967, one day after the beginning of the Six-Day War, with a joint Arab decision to deter any countries from supporting Israel militarily. Several Middle Eastern countries eventually limited their oil shipments, some embargoing only the United States and the United Kingdom, while others placed a total ban on oil exports. The Oil Embargo did not significantly decrease the amount of oil available in the United States or any affected European countries due mainly to a lack of solidarity and uniformity in embargoing specific countries. The embargo was effectively ended on September 1 with the issuance of the Khartoum Resolution. Source: Wikipedia

The 1973 oil crisis

The 1973 oil crisis began in October 1973 when the members of the Organization of Arab Petroleum Exporting Countries (OAPEC, consisting of the Arab members of the OPEC plus Egypt, Syria and Tunisia) proclaimed an oil embargo. By the end of the embargo in March 1974, the price of oil had risen from $3 per barrel to nearly $12. The oil crisis, or “shock”, had many short-term and long-term effects on global politics and the global economy. It was later called the “first oil shock”, followed by the 1979 oil crisis, termed the “second oil shock.” Source: Wikipedia

The 1979 energy crisis

The 1979 (or second) oil crisis or oil shock occurred in the United States due to decreased oil output in the wake of the Iranian Revolution. Despite the fact that global oil supply decreased by only ~4%, widespread panic resulted, driving the price far higher than justified by supply. The price of crude oil rose to $39.50 per barrel over the next 12 months and long lines once again appeared at gas stations, as they had in the 1973 oil crisis. Source: Wikipedia

The 1980s oil glut

The 1980s Oil Glut was a serious surplus of crude oil caused by falling demand following the 1970s Energy Crisis. The world price of oil, which had peaked in 1980 at over US$35 per barrel ($100 per barrel today), fell in 1986 from $27 to below $10 ($58 to $22 today). The glut began in the early 1980s as a result of slowed economic activity in industrial countries (due to the crises of the 1970s, especially in 1973 and 1979) and the energy conservation spurred by high fuel prices. The inflation adjusted real 2004 dollar value of oil fell from an average of $78.2 in 1981 to an average of $26.8 per barrel in 1986. Source: Wikipedia

The 1990 oil price shock

The 1990 oil price spike occurred in response to the Iraqi invasion of Kuwait on August 2, 1990.[1] Lasting only 9 months, the price shock was less extreme and of shorter duration than the previous oil crises of 1973 and 1979-1980, yet the rise in prices is widely believed to have been a significant factor in the recession of the early 1990s. Average monthly prices of oil rose from $17 per barrel in July to $36 per barrel in October. As the U.S.-led coalition experienced military success against Iraqi forces, concerns about long-term supply shortages eased and prices began to fall. Source: Wikipedia