The 2014 plunge in import petroleum
prices: What happened?
Author: Porscha Stiger
International Price Program Discussion Series
October 2, 2015
A Brief History of Petroleum
in America
2
1970s
 Oil
Embargo
 Changing Energy Policy
 Iranian Revolution
3
1980s
 Petroleum
Price Decontrols
 Crude Oil Price Collapse
4
1990s
 Persian
Gulf Crisis
 Dissolution of the Soviet Union
 Energy Policy Act
 Asian Financial Crisis
5
2000s
 Steadily
increasing prices
 Great Recession
6
Crude oil prices
1970 – 2013
Subprime
mortgage
crisis
Iranian
Revolution
ArabIsraeli War
Price
collapse Persian
Gulf War
Demand
growth
from Asia
Asian
Financial
Crisis
7
Brent and WTI Spot Price FOB
Comparison 1986 - 2013
8
IPP Import Crude Oil Index
Data is collected from the Department
of Energy EIA-856 Monthly Crude Oil
Acquisition Report
 Data collection that lists the costs and
quantities of virtually all foreign crude
oil acquired for importation into the U.S.
for the calendar month that DOE
complies 4-month period

9
Brent and WTI Monthly
Spot Prices 2009-2013
10
Prices indexes for import crude
petroleum Jan 2009 – Jan 2013
Index value
(January 2009 = 100)
11
Year-over-year percent change in import
crude petroleum prices, 2006 -2014
12
Prices indexes for import crude
petroleum Jan 2014-Jan 2015
13
Monthly percent change in import crude
petroleum prices, July 2014 – January 2015
14
Factors behind the drop in
import crude petroleum prices
 Strong
global production leading to
oversupply
 Overall weakening of global demand
 Strong U.S. dollar
15
U.S. production and
imports 1994-2014
16
Top five sources of
petroleum imports in 2014
40%
35%
30%
25%
20%
15%
10%
5%
0%
Canada
Saudi Arabia
Mexico
Venezuela
Iraq
17
Brent and WTI Monthly Spot
Prices Jan 2014 – Jan 2015
18
2015 Developments
 EU
uncertainty
 Iranian nuclear deal
 China economic slowdown
19
Brent and WTI Monthly Spot
Prices Jan 2015 – Aug 2015
Jan ‘15
Aug ‘15
20
Prices indexes for import
crude petroleum 2015
Index value
(January 2015 = 100)
1.7%
11.7%
-5.9%
2.4%
2.2%
-21.2%
-14.2%
-1.4%
21
Recent developments
 House
Energy and Commerce
Committee advance HR 702
 Congress approves some
exports to Mexico
22
American Petroleum
Institute
23
Summary
2014 plunge resulted from both geopolitical
and economic factors
 Prices remain low and uncertainty lingers as
to when the market will reach a new
equilibrium
 China’s weak economic outlook signaling
weakened demand coupled with oversupply
may continue to put downward pressure on
prices
 Renewed calls to export U.S. petroleum
continue despite low prices

24
Contact Information
Porscha Stiger
Industry Analyst
International Price Program
www.bls.gov/mxp
202-691-7141
[email protected]