One of the factors that limit oil prices is that the cost of generating electricity from solar energy is lower than fossil fuels in the last two years.
These developments are happening at a time when crude oil producer countries struggle to balance their product supply, demand and price policies with global oil supply and demand. Eventhough, the geopolitical maneuvers are infertile, and apart from their temporary effects, they are not able to put prices in excessive trend.
As a reason for the limited rise in oil prices, we can point to the unmanned aerial attack on the largest oil processing facility in Saudi Arabia. The attack on the Saudi Aramco plant reduced Saudi oil production by half, and the world’s daily production by 5%.
There was an 11-day impact on the markets. First, a sudden increase in oil prices of up to 8%, then 4% and then to zero.
A persistent impact on oil prices and a higher rate of sustainability than this requires a much larger and different phenomenon.
The transition from oil, natural gas and coal to solar energy in electricity generation reduces the popularity of fossil fuel, which in fact expresses a permanent change in environmental health and economic benefits. Renewable energy investments have caught a serious trend in terms of being an opportunity.
In a report published last year by the International Renewable Energy Agency (IRENA), an intergovernmental body aimed at helping countries transition to sustainable energy sources, the electricity produced by the coastal wind and solar energy is estimated to be cheaper than any fossil fuel source by 2020.
