Recent History 2

Gulf War I did nothing to Oil prices. Saudi Arabia at the behest of US kept pumping Oil as much as the world needed provided the US got rid of Saddam Hussein from the neighborhood. World heaved a sigh of relief as Gulf War I shooting ended. During and after the Gulf War I, prices remained stable at $15 to $19 a barrel. Since then, the US and the European demand have increased roughly at the rate of 6 to 8% a year. This has strained the supply situation. In addition from 1999 onwards China and India added on to the market demand as big importers. The latter with rapidly increasing economies put a strong pressure on demand side of the equation. Oil prices began to increase once again. By year 2000, the prices shot up to about $27 a barrel. Also superimposed are events, which impacted the supply and demand, and major events, which impacted the prices.
Crude price have been hostage to the world events. Also production cuts or restoration by OPEC gravely impact the market place.