![\"The](\"https:\/\/www.newsbeep.com\/us-pa\/wp-content\/uploads\/2026\/10\/count.gif\")
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This story was originally published<\/a> in The Conversation<\/a>.<\/p>\n Pittsburgh is complicated. Your news shouldn\u2019t be shallow.<\/p>\n Get deeply reported local journalism that asks hard questions, explains powerful systems and stays with the story. Sign up for Public Source\u2019s newsletter today.<\/p>\n The fall of 2026 is a moment of energy centrality, when geopolitics unfolding far away shows up in Americans\u2019 everyday lives.<\/p>\n In Pennsylvania, the statewide diesel price averages $6.50<\/a> per gallon. In Iowa, farmers are paying more than $6 a gallon<\/a> for diesel. And in Alaska, unleaded gas runs more than $9 a gallon<\/a>.<\/p>\n As a distinguished professor of history and environmental studies at Penn State Altoona<\/a>, I write widely about oil<\/a> and energy issues<\/a>. This moment has me thinking about how the oil industry began nearly 170 years ago<\/a> in Northwestern Pennsylvania.<\/p>\n Setting crude prices in Oil City<\/p>\n In 1859, Edwin Drake struck oil<\/a> along Oil Creek near Titusville, Pennsylvania. His well was funded by investors from New Bedford, Massachusetts, who were looking for a replacement for whale oil, which was expensive and challenging to acquire.<\/p>\n The first oil deals were struck on the streets of Oil City, about 90 miles north of Pittsburgh, while traders were still working out basic questions about \u201crock oil,\u201d as crude was then called: What was it good for, and how much should it cost?<\/p>\n To create a more formal system, the oil traders developed a railroad car designed to be a rolling oil exchange<\/a> on the Oil Creek Railway. It made 13 stops daily between Titusville and Oil City, and trading was conducted on the honor system, with no written certificates of purchase or sale.<\/p>\n As the industry quickly grew<\/a>, an oil exchange office was set up in the Arlington Hotel<\/a> in Oil City.<\/p>\n Traders pushed for a building of their own, arguing that a growing industry needed a more formal market. By 1874, Pennsylvania\u2019s Oil Valley was producing roughly 30,000 barrels of crude oil<\/a> a day, which sold for an average of about $1.15 a barrel.<\/p>\n Rather than physically moving barrels around, trading had moved from handshakes to paper. Pipelines issued certificates representing the oil in their lines. Traders bought and sold the paper certificates<\/a> representing oil, often trading the same barrels many times in a single day. As a result, the volume of oil changing hands could reach 10 million to 14 million barrels a day, hundreds of times more than the wells actually produced.<\/p>\n In April 1874, a group of Oil City oil men received a state charter<\/a> to form the Oil City Oil Exchange. Construction started in July 1877 at the corner of Center and Seneca streets.<\/p>\n When the Oil Exchange opened in April 1878, the local newspaper called it<\/a> \u201cthe largest and most elaborate structure ever erected in the Oil Region.\u201d The building, the paper said, reflected how big the speculative side of the oil trade had become. Standard Oil, the nation\u2019s largest oil company at the time<\/a>, owned by John D. Rockefeller, kept offices in the building.<\/p>\n The Oil City Oil Exchange<\/a> heavily influenced early crude oil pricing. Brokers there collected 10 cents a barrel from buyers and 5 cents from sellers.<\/p>\n While the Oil City Oil Exchange was the center of the oil industry for nearly two decades, by 1895 Standard Oil had effectively cornered the market. Its chief buyer, Titusville resident Joseph Seep, began paying producers cash directly, at a price Standard set itself. That control lasted until 1911, when the U.S. Supreme Court ruled in a landmark antitrust case<\/a> that the trust had to be broken into 34 separate companies.<\/p>\n After that, no single company controlled the price of crude oil.<\/p>\n Who sets the price of oil now<\/p>\n Predicting oil prices became a much bigger concern after the oil crises of the 1970s<\/a>, when sudden price hikes rattled economies around the world.<\/p>\n Today, the price of crude oil is set largely by traders on two exchanges<\/a>: the New York Mercantile Exchange and the Intercontinental Exchange. Prices there shift from second to second, and gas prices at the pump follow them, usually within days or weeks.<\/p>\n Much of that trading involves futures contracts, which are agreements to buy oil at a set price on a future date. In the U.S., the benchmark contract is for oil delivered to Cushing, Oklahoma, a storage hub where many of the country\u2019s pipelines meet.<\/p>\n The latest shock to that system began this year. War began on Feb. 28, when the U.S. and Israel launched airstrikes on Iranian military targets<\/a> that killed Iran\u2019s supreme leader, Ayatollah Ali Khamenei. Iran struck back with missiles and drones and began attacking commercial ships<\/a> in the waters around the Strait of Hormuz, the narrow channel between Iran and the Arabian Peninsula that connects the Persian Gulf to the open ocean.<\/p>\n Within days, the attacks and a wave of canceled shipping insurance brought tanker traffic nearly to a halt.<\/p>\n On March 2, a Revolutionary Guard commander made the closure official in a statement carried by Iran\u2019s state media<\/a>: \u201cThe Strait of Hormuz is closed. If anyone tries to pass, the heroes of the Revolutionary Guards and the regular navy will set those ships ablaze.\u201d<\/p>\n Roughly one-fifth of the world\u2019s oil<\/a> normally passes through the strait. Most of it goes to Asia, not the U.S. But because oil is traded on a global market, prices rose everywhere<\/a>.<\/p>\n Oil and gas prices kept climbing as peace talks failed. By May, the average price of a gallon of regular gas in the U.S. was 50% higher than before the war began. Since then, Gulf oil producers have found ways around the blockade<\/a>, sending oil through pipelines to ports outside the strait and through a U.S.-guarded shipping route near Oman. By late September, those work-arounds had restored about half of the oil that normally passes through the strait, helping keep crude prices around $100 a barrel instead of the much higher levels many analysts had feared.<\/p>\n Oil City\u2019s exchange building is long gone. It was torn down in 1926 to make way for a bank. But the market its traders built, where paper claims on oil change hands far faster than the oil itself moves, still sets what drivers pay at the pump in Oil City and everywhere else.<\/p>\n Read more of our stories about Pittsburgh and Pennsylvania<\/a>.<\/p>\n Brian C. Black<\/a> is a distinguished professor of history and environmental studies at Penn State.<\/p>\n \n\tMORE STORIES\n<\/p>\n Help us continue telling stories like this one.<\/p>\n We\u2019re Pittsburgh\u2019s Public Source, an independent, nonprofit newsroom. That means we rely on donations from readers like you to help us report accurate, timely and impactful stories for the Pittsburgh region \u2014 available to everyone without paywalls. <\/p>\n Everyone deserves access to credible information to understand and help shape the region they call home, which is why we work hard everyday to deliver fact-checked stories on education, environment, health, local government and more.<\/p>\n We’ve seen our journalism prompt widespread change<\/a> in the Pittsburgh region \u2014 but none of it would be possible without the support of our community. If you found this story valuable, consider “paying it forward” by making a gift today<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"This story was originally published in The Conversation. Pittsburgh is complicated. Your news shouldn\u2019t be shallow. Get deeply…\n","protected":false},"author":2,"featured_media":305451,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[73,75,74],"class_list":["post-305450","post","type-post","status-publish","format-standard","has-post-thumbnail","category-pittsburgh","tag-pittsburgh","tag-pittsburgh-headlines","tag-pittsburgh-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts\/305450","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/comments?post=305450"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts\/305450\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/media\/305451"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/media?parent=305450"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/categories?post=305450"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/tags?post=305450"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"Dozens](\"https:\/\/www.newsbeep.com\/us-pa\/wp-content\/uploads\/2026\/10\/file-20261006-50-f82xv3.jpg\")
Before Oil City had an exchange building, oil men traded crude oil on the street. (Photo courtesy Oil Region Library Association<\/a>)<\/p>\n![\"Businessmen](\"https:\/\/www.newsbeep.com\/us-pa\/wp-content\/uploads\/2026\/10\/file-20261006-51-ag5mio.jpg\")
As the industry quickly grew, an oil exchange office was set up at the Arlington Hotel in Oil City. (Photo courtesy Oil Region Library Association<\/a>)<\/p>\n![\"Banner](\"https:\/\/www.newsbeep.com\/us-pa\/wp-content\/uploads\/2026\/10\/1791859576_242_In-house-ads-or-ads-for-outside-advertising.jpg\")
<\/a><\/p>\n![\"7-Eleven](\"https:\/\/www.newsbeep.com\/us-pa\/wp-content\/uploads\/2026\/10\/IMG_0836.jpg\")
A 7-Eleven gas station in Ingram shows regular gas in 2020 selling for below half of today\u2019s average price per gallon. (Photo by Jay Manning\/Pittsburgh\u2019s Public Source)<\/p>\n![\"A](\"https:\/\/www.newsbeep.com\/us-pa\/wp-content\/uploads\/2026\/10\/AP26273500858696.jpg\")
A sticker placed by an unidentified person depicting President Donald Trump and reading \u201cI DID THAT!\u201d is affixed beside gasoline and diesel prices at a gas station in Newtown, Pa. on Sept. 9, as rising pump prices test Trump\u2019s campaign pledge to cut energy costs. (Photo by Ted Shaffrey\/AP Photo)<\/p>\n