The rising cost of energy has become a significant concern globally, affecting households, businesses, and economies. Several factors contribute to this surge, including geopolitical tensions, supply chain disruptions, and the increasing demand for energy as economies recover from the COVID-19 pandemic. Traditional energy sources like oil, gas, and coal have seen substantial price hikes, leading to higher electricity bills and operational costs.
Why Are Energy Prices So High?
- Geopolitical Factors: Conflicts and political instability in key oil-producing regions can disrupt supply chains, leading to price spikes.
- Supply and Demand Imbalance: The pandemic caused a sharp drop in energy demand, followed by a rapid rebound that outpaced supply capabilities.
- Fossil Fuel Dependency: Heavy reliance on fossil fuels makes economies vulnerable to price volatility and supply constraints.