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Oil plays a negligible role in power generation and therefore does not compete with renewables in this respect. Renewables have become the dominant source of new power generation capacity over the last six years because they are competitive at the bottom end of the conventional fossil fuel power generation cost range – primarily with coal.

Oil plays a much more important role in the transport sector, which accounts for half of total demand, and where without low-emission transport policies in place, an extended period of low oil prices, may impact the speed of electric vehicle adoption.

Conversely, oil price volatility may undermine the viability of unconventional oil and gas resources as well long-term contracts, providing a window of opportunity to reduce or redirect fossil fuel subsidies towards clean energy, while minimising the potential of social disruption.