As coronavirus shocks the energy sector and economy, is now the time for a new energy order?
- COVID-19 has sent shockwaves through the economy, including the energy sector.
- Unprecedented global collaboration has been explored to stabilize energy markets.
- The crisis offers an opportunity to consider a new energy order to enable the energy transition in a sustainable way.
The COVID-19 pandemic has affected every industry in one way or another. For oil and gas, prices have plummeted with the potential to cause disruptions well beyond the energy sector.
Though this is the worst possible way to begin a decade, the coronavirus pandemic and the collapse of oil prices also offer an opportunity to consider unorthodox intervention in the energy markets and global collaboration to support the recovery phase once the acute crisis subsides.
The most important element of this agreement, beyond the cut in oil production, is the mobilization of parties with competing interests to work towards the shared and optimal objective of market stability.
Oil and gas are still considered key elements of the economy, with an important role in enabling prosperity for everyone (producers and consumers alike). While oil-producing countries make money from each barrel of oil sold, oil-consuming countries also generate an income on oil through the tax system at the state level and through dividends in saving funds, pension funds and the like, which are owned by individual citizens. And in some countries, the revenue from these taxes is used to finance green infrastructure projects.
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