The dramatic fall in oil prices will positively boost global growth by up to 0.7 percentage points in 2015, two IMF officials wrote. On the one hand, it will particularly help developed economies to get a bit more time before entering a feared decade of dull growth. For instance, even French president François Hollande whose popularity reached lowest level ever could benefit from such Christmas-like gift – a bit more growth and a bit less unemployment – and see his political destiny unexpectedly revive thanks to circumstances he finally had very little to do with. On the other hand, “continued (oil) prices declines would for some countries (i.e. Venezuela, Iran, Russia, Nigeria) and companies make an already difficult situation even worse,” the IEA said in its Dec. 2014 Oil Market Report, possibly triggering social unrest and greater political instability.
According to Cyceon, the repercussions on the geopolitical stage in 2015 will fuel more challenging events than governments – especially western – have forecast. “One should not underestimate the potential for response of a country like Russia in a current situation it is taking as a deliberate humiliation by the West,” Cyceon managing director Charles Rault commented. “It does have consequences on the long-term geopolitical line of events. Western politicians mostly think short-term, it means that in the long run, they don’t have a clue about what their successors will have to deal with. The result could be the very opposite of what was hoped for in the first place,” Rault warned. “It has to do with politics, and it has to do with business too. Financial consequences are real,” he added.
To conclude, the development of green energy will suffer from the drop in oil prices as investors and consumers will re-direct their attention on fossil-fuels investment opportunities and products. As oil prices plummeted, a number of green energy stocks collapsed as well. 2015 won’t be an easy year, and oil prices will be a central issue.