Databank Research has projected that the ongoing global transition to green energy could drive a reduction in international oil prices in 2025, potentially easing costs for domestic essentials and stabilizing monetary environments.
The research highlights the impact of declining oil demand, particularly from China, as a key factor in the anticipated price drop.
According to Databank, the global shift toward renewable energy and sustainable practices is reshaping energy consumption patterns, with China, a major oil consumer, reducing its reliance on fossil fuels. This decrease in demand is expected to exert downward pressure on oil prices internationally.
The report suggests that lower oil prices will not only suppress inflationary pressures but also create a more stable monetary environment for economies heavily reliant on energy imports.
“As the global shift towards green energy progresses, we expect decreases in demand, particularly from China, to drive down international oil prices, further suppressing costs for domestic essentials and potentially sustaining a stable monetary environment,” the report stated.
China has been a leader in the global green energy transition, investing heavily in renewable energy technologies and infrastructure. The country produces more than 80% of the world’s solar panels and has rapidly expanded its wind energy capacity.
In the automotive sector, electric vehicle (EV) sales in China are expected to surpass traditional combustion engine vehicles for the first time in 2025, with EV sales projected to exceed 12 million units.
Other countries are also making significant strides in the transition to green energy. Germany’s “Energiewende” initiative aims to generate 80% of its energy from renewable sources by 2030, while Italy plans to phase out coal-fired electricity by 2025, replacing it with renewable and gas-fired energy.
Portugal is accelerating its goals, targeting 80% renewable energy by 2026, and the Netherlands has achieved record growth in solar and wind energy, now generating over half of its electricity from renewables. These collective efforts are reshaping the global energy landscape and driving down oil demand.
In Africa, Ghana has introduced electric vehicles into its transportation sector, launching its first fleet of electric buses to reduce urban pollution and promote sustainable transport solutions.
