Is there still a link between oil prices and renewable energy development in the GCC? – Arabian Business

Is there still a link between oil prices and renewable energy development in the GCC? – Arabian Business

Volatile oil and gas prices have major effects on the national budgets of natural resource-rich countries in the GCC. Before the pandemic-driven plunge in oil prices in 2020, the share of fuel exports within all merchandise exports was 94 percent for Kuwait, 89 percent for Qatar, 80 percent for Saudi Arabia and 78 percent for the UAE.

High oil prices theoretically should work in favour of renewable energy deployment for three main reasons.

Firstly, high oil prices increase the price of electricity in countries where the electricity grid runs dominantly on fossil fuels. Elevated electricity prices make renewable sources more competitive for electricity generation.