Can a boost in oil prices suspend the evolution of the green transportation market? Relationships between green indices and Brent oil

The research aims to answer whether the increases in oil prices can hinder the development of the alternative fuels market and green transportation modes. On the one hand, the growing oil prices encourage individuals to choose alternative transport modes. Conversely, the boosts in oil prices attract investors to the oil market instead of alternative fuels. We analyse the relationships between oil and green indices related to widely-understood transport during the period from 2018 to 2022. We investigate factors that affect these relationships, distinguishing between fundamentals and speculation. We discover that the fundamental factors are crucial in shaping the correlation between Brent and green indices. In two of the three analysed cases, the correlation was constantly positive during the studied period, which means that the indices grew together with Brent prices. We show that the effect of increasing oil prices can be twofold — depending on the origin of the change. It can contribute to the interest in alternative transport growth if it results from oil demand shocks driven by economic activity. However, a boost in oil prices following positive oil consumption demand shocks or expectations about the increases of future oil prices can cause capital outflow from the alternative transportation market.