OIL PRICES AND RENEWABLE ENERGY: OIL DEPENDENT COUNTRIES

Abstract

Volatility in oil prices is argued to be one of the reasons of the rising attractiveness of renewable energy as a way to lower oil dependence, which creates vulnerability to oil price shocks. However, the scenario can be different for oil importing and oil exporting economies. This study investigates the impact of oil price on renewable energy taking into account of the distinction between oil exporters and oil importers. For a group of major oil exporters and a group of major importers, the relationship between oil price volatility and renewable energy, is examined using different methodologies. The results reflect distinct results for oil exporters and oil importers due to their diverse motivations.