17 January 1991: Oil collapses as Desert Storm begins
When the US-led air campaign against Iraq began, oil traders expected the worst. Instead crude prices fell by about a third in a single day, the largest one-day drop on record at the time, as it became clear that Gulf supplies were not in danger. Stocks rallied hard. Months of fear had already been priced in, and the actual war turned out to be less frightening than the waiting.
The lesson: By the time a feared event finally happens, the price often already reflects it, and then some.
What it meant for investors
$1,000 in Crude oil (barrel) at the start of 1995 → $3,611 today, vs $14,783 in the S&P 500.
We start the clock at the start of 1995, the first year in our price data after the event. That is 3.6 times the money, but $11,171 less than a plain index fund made over the same years.
What Crude oil (barrel) teaches: You cannot easily own oil itself, only futures contracts; the negative print of April 2020 showed that storage and contract mechanics can dominate supply and demand.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 1995 | $18.00 | $3,611 | $14,783 |
| 2000 | $26.00 | $2,500 | $4,626 |
| 2003 | $32.00 | $2,031 | $7,727 |
green = beat the S&P 500 · red = lost money
What if you bought Crude oil (barrel)? Every starting year and the full story →
More Crude oil (barrel) history
- 20 March 2003: The Iraq War begins
- 20 April 2020: US oil prices go negative
- 11 July 2008: Oil peaks at $147 a barrel
- 29 August 2005: Hurricane Katrina hits the Gulf Coast
- 17 October 1973: Arab oil producers wield the oil weapon
- 26 November 2021: Omicron spoils Black Friday
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
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