The rise and fall of prices in the oil and gas industry are affected by world events.
It’s all about supply and demand.
Certain happenings tend to have a consistent effect on oil and gas industry trends, such as war and other world crises, natural disasters, political upheaval, weather factors, and refinery or pipeline issues.
Let’s take a look back at 11 major events that affected oil and gas operations throughout the world.
1. Boom and Bust (1865-1890)
Following the Civil War (during which oil prices were high), the United States experienced a period of alternating economic growth and decline, referred to as “Boom and Bust.”
In this particular time period, the ups-and-downs were caused by fluctuations in U.S. drilling.
(It’s important to note that during the 19th century, gas was primarily used for lamps. In the 1890s, as electricity became more popular, gas became a source for heat. Vehicles weren’t common for a few more decades.)
2. Recession (1890-1892)
Following the post-Civil War Boom and Bust period, the United States hit a recession.
Oil prices fall during a recession because people are spending less money so demand is lower and there’s literally an excess left in the pipeline.
3. Cholera epidemic (1894)
In 1894, Azerbaijan was hit by a Cholera epidemic.
This had a dramatic effect on oil production and prices around the world spiked.
4. West Coast gasoline famine (1920)
As more people bought automobiles of their own, obviously the need for gasoline went through the roof.
As a result, oil and gas prices shot up, as well.
5. The Great Depression (1931)
This desperate time for the United States brought oil and gas prices to a record low.
Much like the recession of the 1890s – only far more severe – people weren’t spending and the demand dropped.
6. Post-war boom (1947)
The end of World War II sparked a prosperous time for the United States.
As people became more financially stable, they bought cars, which caused a gasoline shortage.
Prices were up once again.
7. Suez Canal crisis (1956-1957)
In 1956, Israel invaded Egypt. Britain and France followed in short succession in an attempt to regain Western control of the Suez Canal.
The problem for oil and gas operations was that 10% of the world’s oil supply was now cut off.
As you can probably predict – prices spiked.
8. Iranian Revolution (1978-1979)
Ayatollah Khomeini was named Supreme Leader of Iran after the previous leader was overthrown in a dramatic revolution by Islamic organizations and Iranian students.
Khomeini limited oil and exports AND canceled oil contracts with all American companies.
As a result, oil and gas prices went up.
9. Gulf War (1990)
Saddam Hussein, leader of Iraq, invaded Kuwait and incited the Gulf War.
As history has shown, unrest in the Middle East has an adverse effect on the oil and gas industry and supplies for the rest of the world.
Economic sanctions were imposed on Iraq and prices skyrocketed once again.
10. 9/11 (2001)
The September 11th attack on the United States set off another war in the Middle East.
Aside from the obvious emotional trauma, Americans were also hit hard at the pump as oil and gas prices rose due to the instability of the Middle East.
11. 2008 financial crisis
This downturn in the American economy is considered the worst financial crisis since The Great Depression.
Of course, this crisis hit the global oil and gas markets hard.
The effect on expedited transportation
All oil and gas operations and maintenance services live and die by events around the globe.
It’s not a surprise that the ups and downs of the oil and gas industry have a dramatic effect on emergency shipping services.
The bottom line
From the Civil War to the financial crisis of 2008 – and everything in between – we see how the oil and gas industry is affected.
As prices rise and fall in reaction to the events happening around the world, it’s more important than ever to make sure you know where to go when you have a shipping emergency.
A solid company with a good reputation and years of experience will be able to ride out the ups and downs without sacrificing expediency – no matter what happens in the oil and gas industry news.