Oil Price Volatility: A Century of Geopolitical Shocks
Oil prices have experienced significant swings this century, driven by geopolitical events and economic shifts. One of the most recent spikes occurred in 2026 when a resumption of hostilities between the US and Iran sent oil surging above $100 a barrel.
The conflict blocked the Strait of Hormuz, through which almost 20% of the world's oil is transported, causing Brent North Sea prices to reach a peak of $126.41 a barrel at the end of April.
However, hopes for de-escalation and weaker demand from China led to a decline in prices, with Brent eventually falling below pre-war levels after a memorandum of understanding was signed between Iran and the US.
Other significant oil price swings this century include the 2022 Russia-Ukraine conflict, which caused prices to climb above $100 in February and approach their 2008 highs in March. Oil prices also briefly turned negative during the Covid-19 pandemic in 2020, with WTI slumping to minus $40.32.
The market has been volatile due to various factors such as sanctions, global demand, and supply disruptions. The oil price swings have had significant impacts on the economy and global markets.