The plan plummets global oil prices – the shift to renewables decreases critical demand.

The OPEC oil price is a critical factor influencing the global oil market. This price is determined by the balance of supply and demand for oil, which in turn depends on various factors such as economic growth, political instability, changes in production, and technological innovations. The OPEC oil price also affects the price of WTI oil, as they are closely linked to each other. However, it should not be forgotten that the markup for WTI oil also depends on other factors, such as crude oil types such as Brent and Dubai Crude. This effect is attributed to the high cost of crude oil extraction using the U.S. Hydraulic fracturing technology. As global crude oil prices increase, hydraulic fracturing becomes more lucrative. The Drilling Productivity Report [3] notes that an increase in the number of active wells in the U.S. leads to increased oil production. However, drilling new wells generally costs more than fracturing existing ones and enhancing their productivity. The U.S. fracking boom [4] has resulted in a surge in crude oil production and increased global supply, driving down world oil prices. The reduction in world oil prices triggers the closure of unprofitable wells and a decrease in oil production in the U.S., which directly impacts the WTI price formation and can be incorporated into the model.

However, it also highlights the significance of renewable energy sources as a potential solution to reduce dependence on fossil fuels. With the rise of renewable energy, such as solar and wind power, the demand for crude oil may decrease, thus leading to a reduction in hydraulic fracturing and crude oil production. Moreover, as renewable energy technologies continue to advance and become more affordable, they could become more competitive with traditional energy sources. This could result in a shift towards renewable energy sources and a decrease in the use of fossil fuels, which would not only reduce the impact on the environment but also provide long-term economic benefits. Therefore, the insights gained from understanding the dynamics of crude oil production can inform the transition towards a more sustainable energy future.