Oil Market Volatility: From Arab Spring to Covid

US attack on Iran pushes oil above $100, recalling past price shocks

The price of the US benchmark West Texas Intermediate (WTI) crude surged past $100 per barrel after the United States carried out a military strike on major oil producer Iran, marking the latest sharp fluctuation in global oil markets this century.

According to Agence France-Presse, crude prices have seen dramatic swings over the years, including a historic surge to nearly $150 per barrel in 2008. The market also witnessed an unprecedented collapse in 2020, when prices briefly turned negative during the COVID-19 pandemic as demand plunged worldwide.

Major Price Swings in the 21st Century

2022: Impact of Russia’s Ukraine invasion
Oil futures last crossed the $100 mark in February 2022 following the Russian invasion of Ukraine by major oil and gas producer Russia. By March that year, prices had neared the record levels seen in 2008, with Brent crude touching $139.13 per barrel and WTI climbing to $130.50.

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2020: Covid pandemic
Two years before crude prices again crossed $100 after the Russian invasion of Ukraine, the oil market witnessed an unprecedented crash during the COVID-19 pandemic. Global lockdowns forced offices and factories to shut while air travel came to a standstill, sharply reducing fuel demand.

The situation worsened due to limited storage capacity and a price war between Saudi Arabia and Russia. As a result, the US benchmark West Texas Intermediate (WTI) plunged to minus $40.32 per barrel, meaning producers had to pay buyers to take oil. At the same time, Brent crude dropped to a record low of $15.98.

Oil Price Shocks: From 2008 Record High to Arab Spring and Iran Sanctions

2012: Iran crude embargo
Oil prices had slipped below $90 amid the Eurozone debt crisis but soon rebounded above $100 after Western nations imposed sweeping sanctions on Iran, including restrictions on its crude exports. The measures were aimed at curbing Tehran’s nuclear programme, a long-running source of tension with United States.

Rising geopolitical tensions in the Middle East, particularly the Syrian Civil War, kept oil prices largely above $100 until 2014. Prices later dropped below $50 in early 2015 as a surge in American shale oil production flooded global markets.

2011: Arab Spring
In March 2011, Brent crude jumped to $127 per barrel amid political upheaval across the Middle East and North Africa. The Arab Spring uprisings led to the fall of long-standing leaders in Tunisia, Egypt, and Yemen, while unrest also spread across the region, including major oil producer Libya.

2008: Record-high $147
On July 11, 2008, Brent crude reached an all-time high of $147.50 per barrel after first crossing the $100 mark earlier that year. On the same day, West Texas Intermediate (WTI) hit a record $147.27 per barrel.

The surge was driven by declining US stockpiles, robust demand from China, and geopolitical tensions in key OPEC members such as Iran and Nigeria. A weaker US dollar also supported prices by making dollar-denominated crude cheaper for buyers using other currencies.

However, by December 2008, Brent had fallen sharply to around $36 per barrel as the global economy plunged into recession following the Global Financial Crisis.

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