The price of crude oil hit record highs of more than US$50 per barrel, taking some of the steam out of the global economic recovery last year.
Oil prices remained high in the last six months of the year, as soaring demand and depressed supplies took their toll on the market.
The cost of oil had a deleterious effect on world stock markets, and according to some economists was responsible for depressing world economic growth by nearly three quarters of a percentage point.
Rapid demand growth in China, India and the US forced OPEC to pump at their highest level in 25 years, leaving little spare capacity to deal with unexpected outages.
Prices have dropped back 22 percent over the last two months on signals that higher fuel costs were beginning to weigh on economic growth.
In the last trading day of 2004, London Brent crude rose US$0.09 to US$40.46 a barrel -- more than US$10 up on the end of last year, but around US$11.50 below a record high of US$51.94 hit on Oct. 27.
Brent this year averaged US$38.19, up 34 percent from US$28.48 in 2003 and the highest annual level on record, according to figures from oil major BP.
This year's Brent average was more than US$2 up on a previous record of US$35.69 set in 1980 after the Iranian revolution and at the outset of the Iran/Iraq war. Adjusted for inflation, 1980's average works out at US$80 in today's money, according to BP.
Persistent concerns over supply security in Middle Eastern and African producers helped drive this year's rally, which extended OPEC producers' price boom into a sixth year.