The Most Volatile Commodity on Earth
In April 2020, the price of oil briefly turned negative. Not close to zero, actually negative, meaning producers were paying buyers to take crude off their hands. That moment, strange as it sounds, is the logical endpoint of a story that begins in 1987, when Brent crude was first formally benchmarked and began trading in its modern form. Since then, no other commodity has swung so dramatically, so often, with such global consequence.
Brent crude is not just a fuel price. It is a barometer of geopolitical tension, a signal of economic health, and a number that shapes the budget of nearly every government on earth. Understanding its movements is one of the best short-cuts to understanding the last four decades of global history.
Reading the Peaks and Valleys
The chart below traces Brent crude from 1987 to the present day. The story it tells is anything but smooth. Prices spent most of the late 1980s and 1990s in a flat, relatively low band, hovering between $15 and $30 per barrel. The first Gulf War in 1990 produced a sharp spike, but it was short-lived. For most of that decade, cheap oil was the backdrop to economic growth in the West, rarely discussed and largely taken for granted.
Then came the 2000s. China's industrial expansion drove demand to levels the market had not anticipated. Prices climbed steadily, then sharply, peaking at over $140 per barrel in July 2008. Within six months, as the global financial crisis wiped out demand almost overnight, prices had collapsed to under $40. This single move, from peak to trough in less than a year, remains one of the most dramatic in commodity market history.
The period from 2010 to 2014 brought another sustained rally, with prices holding above $100 for several years. Then the US shale revolution arrived. American producers, using hydraulic fracturing and horizontal drilling, flooded the market with supply that OPEC had not accounted for. By 2016, Brent had fallen below $30 again. The pattern repeats: a shock, a crash, a slow recovery, another shock.
Why 2020 Was Different
Every previous oil price collapse had one cause dominating the picture: a war ending, a recession beginning, a new supply source opening up. The 2020 crash was a collision of two separate disasters arriving at the same moment. COVID-19 destroyed demand with terrifying speed, grounding flights and emptying roads across the globe. Simultaneously, Saudi Arabia and Russia failed to agree on production cuts, triggering a brief but savage price war that flooded an already oversupplied market.
The result was that negative price reading for US crude in April 2020, a number that seemed to break the rules of economics. Brent did not go negative, but it fell below $20. Within eighteen months, it had recovered to above $80, and by mid-2022, Russia's invasion of Ukraine had pushed it past $120 again. Few datasets capture how quickly the world can change as clearly as this one.
What the Long View Teaches
Zoom out far enough and a few conclusions emerge from the data. First, oil price stability is the exception, not the rule. Any assumption that prices will stay predictable for more than a few years has historically been proven wrong. Second, the shocks are not random. They cluster around geopolitical events, financial crises, and major shifts in production technology. Once you know what to look for, the chart reads less like noise and more like a record of decisions made by governments, corporations, and cartels.
Third, and perhaps most importantly, the energy transition has not yet tamed the volatility. Despite massive growth in renewables, global oil demand in 2023 hit record highs, and prices remained sensitive to every headline from the Middle East. The chart does not show a commodity in decline. It shows one that remains, for now, irreplaceable and unpredictable in equal measure.
For anyone who wants to explore the full dataset, including weekly and monthly price series going back decades, all the underlying data is freely available at https://datahub.io/core/oil-prices.