Renewable Energy Investment and Its Impact on International Oil Prices: An Econometric Study for the Period (2004–2023)

Abstract

The research aims to measure the impact of investment in renewable energy on international oil prices over the period (2004–2023), relying on the descriptive-analytical approach and the econometric approach using the Autoregressive Distributed Lag (ARDL) model. The study is based on data on investment in solar, wind, hydroelectric, geothermal, biomass, and ocean energy as independent variables, while oil prices are considered the dependent variable. The results show a rapid growth in global investment in renewable energy, particularly solar and wind energy, alongside fluctuations in oil prices. The Bounds test results also indicate the existence of a long-run equilibrium relationship among the variables. Meanwhile, the ARDL model results reveal a limited impact in the short run; however, in the long run, renewable energy investment contributes to reducing dependence on oil demand, which in turn affects oil price movements.