Oil Price History—Highs and Lows Since 1974

Oil prices have been high and low and everywhere in between over the years. Political and other changes have consistently rocked the oil landscape since 1948. Prices ranged between $2.50 and $3.00 a barrel until 1970. That's $17 to $19 a barrel when adjusted for inflation.

The U.S. was the world's dominant oil producer at that time. It regulated prices. Domestic oil was plentiful. Cheap oil and gas made the expansion of interstate highways, interstate trucking, and auto ownership part of the American Dream.

But multiple changes have occurred since then. 

The 1960s

Saudi Arabia and other foreign oil-exporting nations formed OPEC in 1960, and they wanted more control over oil prices. Regulators allowed U.S. companies to pump as much oil as they wanted in 1971. They began using up surplus reserves. As supply fell, prices rose. America became vulnerable to future shortages.

The 1970s

OPEC didn't really begin flex its pricing muscle until President Nixon effectively took the U.S. dollar off of the gold standard in 1971. The value of the dollar plummeted, taking oil revenues down with it. All oil contracts are traded in U.S. dollars, so oil prices follow the value of the dollar. 

OPEC halted oil exports to the United States in 1973. Its primary goal was to boost oil prices. It also wanted to punish America for its support of Israel in the Yom Kippur War. Congress created the Strategic Petroleum Reserve to provide a 90-day supply and prevent future shortages.

Oil prices have been volatile since 1974. They're affected by more than the laws of supply and demand. Oil prices are determined by oil futures contracts on the commodities markets. This means that commodities traders control oil prices. They'll drive prices up even if they only think there will be a surge in demand, such as during the summer driving season, or if they think there will be a shortage, such as during the Libyan uprising.

The Millennium 

Oil prices developed a predictable seasonal swing in 2011. Prices rose in the spring as oil futures traders anticipated high demand for summer vacation driving. Prices fell in the fall and winter after demand peaked. 

That changed in 2016. OPEC increased prices in November when it cut production because it wanted to keep prices high in the face of increased U.S. production of shale oil and alternative fuels. The supply increase had driven global oil prices down to a 13-year low of $26.55/b on Jan. 20, 2016. As a result, prices responded to OPEC's actions more than seasonal variations. Six months before that, prices had been $60/b. 

Today's oil prices fluctuate due to these constantly changing conditions.

Oil Prices by Year: Average, High, Low, and Events

The following chart shows the prices for imported Brent oil according to the U.S. Energy Information Administration. The first column shows the average annual price, followed by the high and low oil prices that year and the reasons and accompanying events for the price variations. 

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