Historical Cycles in Oil Markets
Boom-bust cycles, demand and supply elasticity; lessons from 2008, 2014–2016, 2020
Historical Cycles in Oil Markets
Executive Summary
Oil prices do not trend smoothly up or down. They cycle: booms of 5–7 years with high prices and tight supply, followed by busts of 3–5 years with low prices and oversupply. Understanding these cycles is essential for long-term planning, stranded-asset assessment, and strategic hedging. This module traces historical cycles from the 1970s through the 2020s, identifies drivers and lags, and draws lessons for energy professionals. For practitioners and consultants, it supports cycle-aware risk management and scenario design.
Learning Objectives
By the end of this module you will be able to understand the boom-bust cycle dynamics that characterise oil markets, analyse the drivers of cycle peaks (demand growth, supply constraints) and troughs (oversupply, demand destruction), evaluate the duration and magnitude of historical cycles, assess production response lags and investment cycles, and forecast future cycle trajectories under energy transition scenarios.