Geopolitical shifts, such as the political crisis in Venezuela, trade sanctions against Iran and oil production cuts across the Organization of the Petroleum Exporting Countries (OPEC) countries drove commodity price volatility in 2018 and resulted in rising fuel import bills for many countries, according to the World Economic Forum report on Monday.
Last August, Washington imposed economic sanctions against Venezuela after president Nicolas Maduro launched a new constituent assembly with the power to rewrite the Constitution and dissolve institutions.
U.S. President Donald Trump said he would not rule out a 'military option' in Venezuela to put an end to the economic and political crisis that led to shortages of food and medicine and forced the government to eliminate its socialist programs.
The crises resulted in deadly anti-government protests that killed at least 120 victims between April and July.
On Aug. 25, the U.S. applied new sanctions on the Venezuelan government, banning Americans from doing business with the state-owned PDVSA oil and natural gas company.
In addition, early in May 2018, U.S. President Donald Trump announced that he was pulling the United States out of the Iran nuclear agreement.
Trump announced he would exit the landmark Joint Comprehensive Plan of Action (JCPOA) nuclear deal signed in 2015 with Iran and several other nations. The move was widely expected, and the White House immediately prepared to sanction Iran and companies that do business with Iran.
The P5+1 countries -- the U.S., Britain, France, Russia, China and Germany -- and Iran reached an interim agreement on Nov. 24, 2013 in Geneva, Switzerland, when Western sanctions on Iran were eased, and Iran stopped some of its uranium enrichment activities.
According to Western members, Iran is secretly developing nuclear weapons in its uranium enrichment program, while Iran says that the program is for peaceful use of nuclear energy.
Sanctions on Iran and in Venezuela have resulted in less oil on the global market while forcing oil prices higher and resulting in more expensive fuel import bills.
-Energy transition
The World Economic Forum released a report entitled Fostering Effective Energy Transition 2019 edition, which revealed the top events that shaped the global energy transition, hydrocarbon developments, energy diplomacy and carbon emissions.
According to the report, through continued technological advances and efficiency gains, the U.S. became the largest producer of crude oil.
In addition to hydrocarbon developments, the report quoted from the Geopolitics of Renewable Energy, a 2017 paper of the Belfer Center for Science and International Affairs from the Harvard Kennedy School, in the U.S. which determined that renewable energy is gradually growing in importance as countries are looking to gain competitive advantages in technologies and materials required to develop such infrastructure.
The report also said that the number of people without access to electricity fell below 1 billion due to substantial gains made in South and South-East Asia.
The need for resilience across the energy infrastructure was seen last year, according to the World Economic Forum 2019 report, Cyber Resilience in the Electricity Ecosystem: Principles and Guidance for Boards.
'Blackouts from successive waves of tropical storms, as well as large-scale infrastructure disruptions from wildfires in the United States, argue strongly for redesigning resilience strategies for security of supply,' the report said, and added that because of increasing digitalization and interconnections in the power system, companies are integrating cyber-resilience as a core business issue.
- Renewables and the environment
2018 was a record year for solar installations, particularly in China. However, the lower solar prices that resulted in sharp price decreases due to oversupply, and and tariffs imposed on solar panel imports to the U.S. put headwinds and financial pressure on solar manufacturers.
The report said that global carbon emissions from fuel combustion grew at an accelerated rate in 2017, while investments in clean energy declined by 8 percent in 2018.
The World Health Organization, in its COP24 Special Report: Health and Climate Change of 2018, estimated that meeting global carbon reduction targets would save the equivalent of 1 million lives per year through related reductions in air pollution.
By Gulsen Cagatay
Anadolu Agency
energy@aa.com.tr