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The future of oil trading: How environmentalism will disrupt crude oil markets in the next 5 years

Key takeaways

Renewable energy will account for 80% of the world’s energy generation by 2030.

It's been a bumpy path – but soaring profits for the oil industry plus government subsidies are helping the transition to green energy.

Traders will need to keep on their toes and look for new opportunities in the energy markets.

If the future is green, what about so-called ‘black gold’ – US crude oil?

The world is embarking on an epochal transition from fossil fuels to green energy. Change is needed to avert the worst effects of climate change. However, the major societal and financial impact means the transition will be bumpy, especially as a political backlash against environmentalism and the green revolution gathers pace.

While the planned obsolescence of fossil fuel threatens to create new rust belts, its influence on oil trading will be historic. The International Energy Agency predicts that renewable energy will make up 80% of the world's power generation by 2030.

That implies brent and US crude oil trading will diminish on the way, while also suggesting a disruption in trade flows, an increase in structural volatility, and a fundamental alteration in commercial and national relationships. Further search points to reaching peak oil by 2030.

Across the intervening few years, the price of oil may govern how the industry evolves until its presumed reduction. Green energy technologies have been banking on sharp increases in fossil fuel prices to make them increasingly competitive. But that “economic case” may be lost if the ramp-up in fossil fuel prices doesn’t materialize.

Indeed, there is strong