NORDSCI Conference proceedings 2021, Book 2

Economics and Tourism

GEOPOLITICAL RELATIONS WITH OIL AT THE TIME OF COVID-19: WITHOUT OIL THERE IS NO PRESENT, WITHOUT GREEN ENERGY THERE IS NO FUTURE

Jasenka Bubic, PhD, Luka Bašic

ABSTRACT

Oil drives the entire world economy, and it is entirely a geostrategy issue. The strong development of the economy over the past few decades has provided a global stage for those countries that have a stable political establishment while managing enormous amounts of oil. Now, year after year, it is becoming increasingly clear that the importance of oil and gas is falling away, and it is those energy sources that bring about a reduction in the half-life that comes into the scene. Oil and gas are non-renewable energy sources and as such are naturally limited, therefore their reserve will become economically unprofitable in the future, and exploitation will reach its natural end. The aim of this research paper is divided into two structures: the first thesis concerns giving a fresh insight into the state of the oil market from the beginning of the pandemic to the present day. The issue of geopolitical relations between Riyadh and Moscow is to be addressed here and how much of a negative consequence the price war has left on their fiscal calculations, although geopolitical friction has deepened the shock further into financial markets. Thus, the fiscal calculation of both countries suffered revenue shocks, but it also prompted an even deeper decline in stock indexes and temporary stagflation of the global economy. The second thesis refers to a brief review of the analysis of the long-term future of non-renewable and renewable energy sources. The future of cleaner forms of energy is imperative, but also a challenging task, as this means shifting the entire structure of national economies to green and renewable. The focus is on giving insight into why this is a necessity, but also why there could be a dangerous precedent and negative cash flows in some structures of the economy. Currently, and any future planning and fulfillment of climate guidelines, must not lead to an increase in energy poverty and consequently a decrease in living standards, because in all geopolitical games the line is always drawn between rich and poor countries, that is, advanced economies and developing economies. Therefore, the long-term and global leaders in green and renewable energy sources will be those countries that successfully implement public interests in these projects, because only in this way can the goal be met – shifting a certain structure of the economy to cleaner sources while satisfying social utility and increasing employment.

KEYWORDS

geopolitical relations, global economy, green energy, oil

REFERENCE

NORDSCI Conference proceedings 2021, Book 2, Conference Proceedings, ISSN 2603-4107, ISBN 978-619-7495-14-0, GEOPOLITICAL RELATIONS WITH OIL AT THE TIME OF COVID-19: WITHOUT OIL THERE IS NO PRESENT, WITHOUT GREEN ENERGY THERE IS NO FUTURE, 103-113 pp, DOI paper 10.32008/NORDSCI2021/B2/V4/09