A history of oil price swings this century

Oil prices have been subject to significant fluctuations since the beginning of the Iran conflict at the end of February. The international benchmark, Brent North Sea crude, reached over $100 a barrel on Wednesday following a recent escalation in the US-Iran war. This war has effectively blocked the Strait of Hormuz, which accounts for nearly 20% of the global oil transportation. Brent hit a peak of $126.41 a barrel at the end of April, while WTI, the main US contract, peaked at $119.48 a barrel in early March.

In June, hopes of de-escalation, weaker demand from China, and the release of strategic oil reserves led prices to decline. Prices fell below pre-war levels when Iran and the US signed a memorandum of understanding to end the conflict. However, recent US-Iran strikes across the region have caused Brent to once again surpass $100, with WTI hovering around $95 a barrel.

In 2022, Russia's invasion of Ukraine led crude futures to surpass $100 shortly after the invasion. Prices approached their 2008 highs, with Brent reaching $139.13 a barrel and WTI reaching $130.50. Western sanctions against Russia and increased demand after the Covid-19 pandemic kept prices above $100 throughout the year. However, prices fell back due to high supplies.

In 2020, oil prices briefly turned negative following the onset of the Covid-19 pandemic, which led to closures in offices, factories, and grounded planes worldwide. Limited storage facilities and a Saudi-Russia price war further contributed to the market's decline. WTI dropped to minus $40.32, meaning producers had to pay buyers to take the oil off their hands, while Brent reached a record low of $15.98.

In 2012, after falling under $90 due to a eurozone economic crisis, oil prices rose above $100 after Western powers imposed sanctions on Iran aimed at halting its nuclear program. Wider Middle East tensions, particularly the Syria conflict, kept prices continuously above $100 until 2014, before they fell under $50 at the start of the following year due to American shale oil flooding the market.

In 2011, Brent surged to $127 in March following unrest in the oil-producing Middle East and North Africa region. The market rose after the Arab Spring uprisings toppled the long-standing leaders of Tunisia, Egypt, and Yemen, as well as the unrest in Libya.