Here we are showing the price of oil per barrel over the course of American history. Between 1861 and 1864, average oil prices spiked from 50 cents to a staggering 8 dollars and 10 cents. This happened because of an increased demand for oil during the Civil War and an oil supply decline due to the depletion of maturing oil fields.
While the 8 dollars and 10 cents may seem like a drop in the bucket today, it is equivalent to 112 dollars adjusted for inflation. Not even the price of oil in the 1970s, caused by Middle Eastern turmoil and another decline in production, or the price of oil this past decade compare. In 1980, the price averaged 97 dollars per barrel, and in 2008, it was 99 dollars per barrel—still 13 dollars short of its price in 1864.
There have only been three major oil price hikes in American history, the most recent occurring this past decade. Increased demand in developing countries, such as China and India, and stagnant global oil production are partly to blame. To keep the price of oil low, oil production must increase—or traditional fossil fuel demand must be offset by an increase in the supply of alternative energy.