Dramatic falls in global oil prices are the result, primarily, of collapsing demand due to the coronavirus pandemic. Other factors predating the crisis are also at work: this year’s price-cutting war between Saudi Arabia and Russia, overproduction resulting in crude oil surpluses and a chronic lack of storage capacity.
Yet conventional market explanations obscure a bigger, more exciting story. It is the story of the green, clean energy revolution, of rapidly expanding use of wind and solar power and the prospective end of the fossil fuel era. Renewables will make up almost 30% of world demand for electricity this year.
Last week, Britain set a record by going 18 consecutive days without resorting to coal-fired power generation, according to National Grid data. The UK also hit a new solar power high on 20 April. Since 2012, the amount of emissions required to produce one kilowatt hour of energy has declined by more than two-thirds.
Britain’s often embarrassing relationship with Saudi Arabia should form part of any post-pandemic reappraisal
These advances towards a net-zero carbon future are artificially accelerated by the Covid-19 lockdown. They could be reversed. Yet sustainable energy generation, and its crucial importance in tackling the climate crisis, is one of many areas where today’s enforced changes could lead to fundamental, permanent shifts in the “post-oil” future.
Britain’s dysfunctional and often embarrassing relationship with Saudi Arabia, one of the world’s leading oil producers, should form part of any such post-pandemic reappraisal. British dependence on Saudi crude increased after Iran’s 1979 revolution. North Sea discoveries changed that. Most imported UK oil now comes from Norway. Only 3% comes from Saudi Arabia.