[1] Commentators attributed these price increases to multiple factors, including Middle East tension, soaring demand from China,[2] the falling value of the U.S. dollar, reports showing a decline in petroleum reserves,[3][4] worries over peak oil,[5] and financial speculation.

[6] For a time, geopolitical events and natural disasters had strong short-term effects on oil prices, such as North Korean missile tests,[7] the 2006 conflict between Israel and Lebanon,[8] worries over Iranian nuclear plans in 2006,[9] Hurricane Katrina,[10] and various other factors.

[12] The recession caused demand for energy to shrink in late 2008, with oil prices collapsing from the July 2008 high of $147 to a December 2008 low of $32.

[14] Oil prices stabilized by August 2009 and generally remained in a broad trading range between $70 and $120 through November 2014,[15] before returning to 2003 pre-crisis levels by early 2016, as US production increased dramatically.

In June 2008, AFP reported that: China became the latest Asian nation to curb energy subsidies last week after hiking retail petrol and diesel prices as much as 18 percent...

The more countries subsidize them, the less likely high oil prices will have any affect [sic] in reducing overall demand, forcing governments in weaker financial situations to surrender first and stop their subsidies.

"[42] U.S. Secretary of Energy Samuel Bodman stated that around 30 million barrels per day (4,800,000 m3/d) of oil consumption (over a third of the global total) was subsidized.

The likelihood that global oil production will decline at some point, leading to lower supply, is a long-term fundamental cause of rising prices.

[citation needed] However, some commentators argued that global warming awareness and new energy sources would limit demand before the effects of supply could, suggesting that reserve depletion would be a non-issue.

It is thought by a number of people, including energy economists such as Matthew Simmons, that prices could continue to rise indefinitely until a new market equilibrium is reached at which point supply satisfies worldwide demand.

[50] Terrorist and insurgent groups have increasingly targeted oil and gas installations, and succeeded in stopping a substantial volume of exports during the 2003–2008 height of the American occupation of Iraq.

[51][52] Such attacks are sometimes perpetrated by militias in regions where oil wealth has produced few tangible benefits for the local citizenry, as is the case in the Niger Delta.

"[56] Also in May 2008, an article in The Economist pointed out that oil futures transactions on the New York Mercantile Exchange (NYMEX), nearly mirrored the price of oil increases for a several-year period; however, the article conceded that the increased investment might be following rising prices, rather than causing them, and that the nickel market value had halved in the year between May 2007 and May 2008 despite significant speculative interest.

Other commodities that were not subject to market speculation (such as coal, steel, and onions) saw similar price increases over the same time period.

[58] In June 2008 U.S. energy secretary Samuel Bodman said that insufficient oil production, not financial speculation, was driving rising crude prices.

[59] This contradicted earlier statements by Iranian OPEC governor Mohammad-Ali Khatibi indicating that the oil market was saturated and that an increase in production announced by Saudi Arabia was "wrong".

[citation needed] In September 2008, Masters Capital Management released a study of the oil market, concluding that speculation did significantly impact the price.

Some speculated that an oil-price spike could create a recession comparable to those that followed the 1973 and 1979 energy crises or a potentially worse situation such as a global oil crash.

OPEC Secretary General El-Badri said that the organization intended to cut output by about 500,000 barrels (79,000 m3) a day, which he saw as correcting a "huge oversupply" due to declining economies and a stronger U.S.

[74] As countries throughout the world entered an economic recession in the third quarter of 2008 and the global banking system came under severe strain, oil prices continued to slide.

The global economic downturn left oil-storage facilities with more oil than in any year since 1990, when Iraq's invasion of Kuwait upset the market.

[77] In early 2011, crude oil rebounded above US$100/bbl due to the Arab Spring protests in the Middle East and North Africa, including the 2011 Egyptian revolution, the 2011 Libyan civil war, and steadily tightening international sanctions against Iran.

[79][80] By January 2016, the OPEC Reference Basket fell to US$22.48/bbl – less than one-sixth of its record from July 2008 ($140.73), and back below the April 2003 starting point ($23.27) of its historic run-up.

[81] OPEC production was poised to rise further with the lifting of Iranian sanctions, at a time when markets already appeared to be oversupplied by at least 2 million barrels per day.

The first three mitigation strategies in the above list are, therefore, in keeping with mainstream economic theory, as government policies can affect the supply and demand for petroleum as well as the availability of substitutes.

These could be partially replaced by bioplastics, which are derived from renewable plant feedstocks such as vegetable oil, cornstarch, pea starch,[86] or microbiota.

[89] The issue came up again in 2004, when oil reached $40 a barrel causing a meeting of 25 EU finance ministers to lower economic growth forecasts for that year.

[90] In 2007, European truckers, farmers, and fishermen again raised concerns over record oil prices cutting into their earnings, hoping to have taxes lowered.

[94] Transportation demand management has the potential to be an effective policy response to fuel shortages[95] or price increases and has a greater probability of long term benefits than other mitigation options.

6377),[100] which directs the Commodity Futures Trading Commission (CFTC) "to utilize all its authority, including its emergency powers, to curb immediately the role of excessive speculation in any contract market within the jurisdiction and control of the Commodity Futures Trading Commission, on or through which energy futures or swaps are traded, and to eliminate excessive speculation, price distortion, sudden or unreasonable fluctuations or unwarranted changes in prices, or other unlawful activity causing major market disturbances that prevent the market from accurately reflecting the forces of supply and demand for energy commodities."