The price of crude oil, from which petroleum
products such as gasoline are derived, is influenced by a number of factors beyond the
traditional movements of supply and demand, notably geopolitics. Some of the lowest
cost reserves are located in sensitive areas of the world. There is not one price for
crude oil but many. World crude oil prices are established in relation to three market
traded benchmarks (West Texas Intermediate [WTI], Brent, Dubai), and are quoted at
premiums or discounts to these prices.
Crude oil import prices come from the Crude Oil
Import Register. Information is collected according to type of crude and average
prices are obtained by dividing value by volume as recorded by customs administrations
for each tariff position. Values are recorded at the time of import and include cost,
insurance and freight (c.i.f.) but exclude import duties.
The nominal crude oil spot price from 1985 to 2008
is for Dubai and from 1970 to 1984 for Arabian Light. These nominal spot prices are
expressed in US dollars per barrel of oil. The real price was calculated using the
deflator for GDP at market prices and rebased with base year 1970 = 100.
Average crude oil import prices are affected by the
quality of the crude oil that is imported into a country. High quality crude oils such
as UK Forties, Norwegian Oseberg and Venezuelan Light are more expensive than lower
quality crude oils such as Canadian Heavy and Venezuelan Extra Heavy. For a given
country, the mix of crude oils imported each month will affect the average monthly
The 1973 Arab oil embargo had a major price
impact as Arabian Light prices surged from USD 1.84/barrel in 1972 to USD 10.77 in
1974. The next spike after 1973 came in 1981, in the wake of the Iranian
revolution, when prices rose to a high of nearly USD 40. Prices declined gradually
after this crisis. They dropped considerably in 1986 when Saudi Arabia increased
its oil production substantially. The first Gulf crisis in 1990 brought a new
peak. In 1997, crude oil prices started to decline due to the impact of the Asian
Prices started to increase again in 1999 with
OPEC target reductions and tightening stocks. A dip occurred in 2001 and 2002, but
the expectation of war in Iraq raised prices to over USD 30 in the first quarter
of 2003. Prices remained high in the latter part of 2003 and in 2004. Crude oil
prices increased dramatically in late August 2005 after Hurricane Katrina hit the
eastern coast of the US Gulf of Mexico. Prices continued to increase throughout
2006 as the demand for oil in emerging economies, especially China, put pressure
on the supply/demand balance, averaging 24 per cent higher than the previous year.
In 2007, the increase continued with Dubai hitting USD 88.82/barrel at the
beginning of November and WTI climbing to USD 96.50/barrel.
In early 2008, prices crossed the symbolic
USD 100/barrel threshold and reached a new peak just under USD 150/barrel in July
2008; this brought the real price of oil in 2008 to an all time high. At the
beginning of 2009, prices fell to USD 40/barrel as the impact of high prices and
the onset of the global financial crisis sharply curbed oil demand. Later in the
year, prices ranged between USD 70 and 80/barrel.
Crude oil prices increased steadily throughout
2010 and into 2011. At the end of April 2011, Dubai was trading at
USD 119.61/barrel and WTI at USD 113.73/barrel.