Oil is an essential resource throughout the world. People use oil in different ways. The world has used oil for many years and will continue to use it as a commodity. The use of petroleum dates back to the 1850s. However, when Edwin Drake produced commercially usable quantities of crude oil from a 69-foot well in Pennsylvania in 1859, he marked a new period when petroleum was considered as a valuable product. Oil prices have been inconsistent since 1859. The discovery of new wells significantly lowered oil prices and caused some oil barons to abandon the industry. However, oil prices have increased over time due to several factors. Many factors determine the supply and demand for oil in the short and long term. First, conflicts around the world influence the supply and demand of oil. For example, the start of the Civil War in the United States of America led to a surge in oil prices and demand. It amplified the effects on the oil market by the cessation of turpentine supplies from the South and the introduction of a tax on alcohol, which rose from 20¢/gallon in 1862 to $2/gallon in 1865, unlike the 10¢/gallon in 1865. ¢/gallon tax on petroleum products. Assuming a yield of approximately 20 gallons of oil per barrel of crude, each 10¢/gallon disparity tax on petroleum products cost two dollars per barrel, providing a competitive advantage for oil. For this reason, the tax eliminated alcohol as a competitor to oil. As a result, oil production declined after 1862, even as new demand pressures mounted. Other conflicts that affected oil supply and demand included the OPEC embargo that occurred between 1973 and 1974, when Syria and Egypt attacked Israel. Others are the Iraq-Iran war between 1981 and 1986, the first P...... middle of paper ...... more than two hundred dollars. In conclusion, oil supply and demand is a complex issue that depends on several factors. Geopolitical affairs are the main issues that affect the supply and demand of oil. Geopolitical factors include wars, uprisings and political inconsistencies around the world. Other factors that influence oil demand and supply include market areas, oil availability, recession, and global GDP. Since 1859, the price of oil has been inconsistent. Despite the fact that oil prices have risen and fallen, they have seen a considerable upward trend. In most cases, the price decline reaches the previous price level. However, the price increase goes beyond previous prices. This trend has caused oil prices to rise over the years. With this in mind, it is clear that by 2020 the real price of oil will exceed $200..