A2 Business, expert explains four reasons that led to oil price hike

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The pandemic, the Russian factor, renewable energy and the increase in energy consumption are the 4 factors that affect the price hike of fuels. 

This arguments were explained to Business News by expert Dael Dervishi, who stated that the demand for fuel has increased with the economic growth after the pandemic, which found the oil producers unprepared.

“The fuel price has always been volatile. It was $ 156 in 2008. This time we are facing many coincidences:  the pandemic. 

“Last spring producers did not know where to do with it, there was no demand, oil was stored on ships and remained at sea for weeks. This imbalance has created a hysteria in the first place and a lack of investments. The largest manufacturer here also suspended them. This sudden demand caught oil producers off guard. The second factor is Russia, which is launching the Nord Stream 2 pipeline, which will transport oil from Russia to Germany and other European countries. Germany exerted pressure on EU members to expedite approval procedures, and it strictly adhered to earlier contracts by not altering them in any way. Another factor is the epoch-making transformation humanity is going through in terms of renewable energy sources. In the EU, this sector has seen a lot of investment. This is due to the fact that EU countries have created incentives, and demand is extremely strong, with unregulated development.

Fourth, there has been an increase in energy use as a result of economic expansion and increasing access to energy. In Norway, electric vehicles account for 75% of all new vehicles. “They don’t use oil anymore; they utilize energy.” This is due to the fact that EU countries have created incentives, and demand is extremely strong, with unregulated development.