Bust. The Great Depression hit and the discovery of new oil fields in Texas sent supply shooting up. The increased supply drove oil prices down 70% from $1.88 per barrel in 1926 to $0.65 per barrel in 1930 .
By 1931, Congress imposed a tariff on imported crude oil to prohibit Russia from dumping cheap crude into the U.S. By limiting that supply, Congress hoped to drive prices back up.
At the same time, the U.S. instituted conservation efforts. But oil was abundant. Supply outpaced demand. So prices remained low.
Even though the discovery of the giant East Texas Field around Wichita Falls in North Texas and the Old Panhandle Field in the Texas Panhandle decimated oil prices… it also sparked a new era in oil production in the United States… Texas would become the largest oil producer in the country, producing 40% of U.S. crude between 1935 and 1960. By 1940, the U.S. produced 60% of the world’s oil. And prices had started to climb slightly.
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