Last weekend’s attacks on Saudi Arabian oil facilities and the spike in crude prices that followed show that the world needs to stop relying on oil, a former national leader told CNBC on Wednesday.
Last weekend, around 50% of Saudi oil output was knocked out after attacks that likely included the use of drones hit production facilities in Abqaiq and Khurais. Houthi rebels from Yemen have claimed responsibility, though the question of who carried out the strikes remains unsettled.
Isn’t it interesting that we source so much (oil) from the most unstable region of the world?
Both the international benchmark Brent crude and U.S. crude jumped more than 15% on Monday, though they withdrew from highs following assurances from Riyadh. During morning trade in Asia on Thursday, Brent and WTI were both marginally higher.
“It’s another signal of (how) the world needs to move beyond oil,” Helen Clark, former prime minister of New Zealand, said of the price volatility. She spoke to CNBC’s “Street Signs” at the BNP Paribas Sustainable Future Forum in Singapore.
“Isn’t it interesting that we source so much (oil) from the most unstable region of the world?” she asked. “That’s not sustainable either.”
Renewable energy ‘becoming irresistible’
That sentiment was echoed by Mark Lewis, global head of sustainability research at BNP Paribas Asset Management.
The economics of the global energy system are “changing dramatically,” and renewables are becoming much cheaper and much more competitive with oil, Lewis told CNBC’s “Squawk Box.”
“We talk a lot about the environmental dimension to this, which is, for me, the most important dimension … of the future of the global energy system,” he said.
“But I think this week’s oil price spike, short lived as it has been, has underlined another dimension to this debate, which is renewable energy is low-cost and stable over the long term,” he said.
While the economics of have “improved enormously,” Lewis acknowledged that there are still obstacles to using renewable energy. However, he said those are technological and political barriers, rather than economic ones.
“You can’t fight the economics forever,” he said. “And I think the economics of renewables now are becoming irresistible.”
