How do volatile oil prices impact renewables and what does this mean for investors?

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We share how volatile oil prices impact investors and renewables, and look at what good looks like using Shell and BP as examples.

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Published on 27 November 2023

It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.

The oil price impacts your life in more ways than you might think. It’s about much more than just how much you pay at the petrol pumps.

Oil prices impact transportation costs and this ripples through the entire supply chain. Businesses pass on increased operational expenses to their customers, resulting in higher prices for a wide array of products.

This can tip both household and corporate budgets into the red, potentially leading to reduced consumer spending and delayed investments.

Higher oil prices can make renewables more competitive, intensifying the focus on sustainable alternatives and encouraging increased investment and innovation.

In 1973, for example, a war between Israel and its neighbours led to an oil crisis which laid the groundwork for the wind power generation industry.

High oil prices can also incentivise