How rising oil prices could lower emissions

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How rising oil prices could lower emissions

Oil has prevailed as the world’s leading energy source since the 1950s. This lucrative liquid powers our vehicles, heats many of our homes and powers our main industries. Unfortunately, because oil is a fossil fuel, it is not sustainable and eventually could run out, meaning we need to turn to renewable sources of energy. Additionally, when fossil fuels like oil are burned, they produce carbon dioxide, a greenhouse gas that contributes towards climate change.

On the other hand, oil is the world’s most commonly traded commodity, since the market can provide traders with great opportunities to profit. This is largely because supply and demand can fluctuate heavily and cause prices to change dramatically.

It is vital that we eventually turn to renewable energy sources. However, in order to reduce emissions and protect the environment, and with oil prices rising significantly, this could happen sooner than initially was predicted. Read on to find out how the increase in price of oil could lower emissions.

Why are oil prices rising?

As the world’s economies recover from the effects of the coronavirus pandemic, the demand for oil has increased. Much of this can be attributed to the fact that lockdowns have been lifted and we are beginning to travel more, both nationally and internationally. Demand has also increased because natural gas prices surged and caused buyers to turn to oil as a cheaper alternative.

The Vitol Group is the world’s largest independent oil trader, and they predicted that the global demand for crude oil could increase by 500,000 barrels per day during the winter months. The higher the demand for something, the more it is going to cost, hence why this spike has caused prices to soar.

If you’re thinking of investing in the oil market, but are wondering, how does oil trading work, then you could find some useful resources online which will tell you all about the external factors that can affect the commodity’s price, like supply and demand.

Will we feel the effects of rising oil prices?

Believe it or not, we are already feeling the effects of rising oil prices. You’ve probably noticed that fuel prices have soared since the pandemic first began in 2020, with the RAC revealing that it had hit an eight-year high with the average cost of petrol coming in at 141.35 pence per litre.

This, combined with a rise in gas and electricity bills in the UK has caused many households to suffer, as they are unable to afford the most basic of living costs.

Rising oil prices and lower emissions

With oil prices rising and drivers paying more and more to fill up their cars’ tanks, we could see an influx of people turn to electric vehicles, to avoid the extortionate fuel prices. Electric vehicles are significantly cheaper to run since drivers can charge them from home, or use many of the free charging points available throughout the country.

The UK has committed to banning the sale of new petrol and diesel vehicles by 2030, which has prompted many individuals to consider electric vehicles as their next car purchase. Though this would aid the global mission to combat climate change, it could have an adverse effect on economies throughout the world that are heavily reliant on oil, and are also recovering from the effects of the coronavirus pandemic.

Every small change that we make that helps to cut emissions will inevitably contribute to our battle towards combatting climate change. Though there has been an increase in purchases of electric vehicles as a result of oil prices rising, this is unlikely to significantly disrupt the oil industry in the immediate future.

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