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The interplay of energy justice, fossil fuel energy, and financial development with the moderating role of green investment funding on crude oil price fluctuations in G20 countries

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  • Ullah, Atta
  • Khan, Saba

Abstract

Global economies continue to face significant challenges owing to fluctuating and comprehending crude oil prices shocks into demand-supply-side. This study examines the effect of energy justice index (EJI), fossil fuel energy consumption (FFEC) and financial development (FD) on crude oil prices, with the moderating role of green investment funding (GIF) using a panel dataset of G20 countries from 2003 to 2022. Employed Bayesian linear regression as primary method while, robustness check is performed using the Bayesian heteroskedastic linear (ML), Bayesian multilevel, and Bayesian RE normal regression, PVARs Stability Tests, and Granger causality Wald tests. The findings reveal that energy justice has a positive impact on crude oil price stability. FFEC and FD have a negative effect on crude oil prices leading unstable fluctuations. Moreover, GIF has a positive impact on crude oil prices, and all moderate interaction terms–EJI × GIF, FEC × GIF, and FD × GIF–positively influence crude oil prices between critical divers. When FFEC falls the demand curve for crude oil shifts result in lower equilibrium price and quantity. Hence, demand for oil is price-inelastic. FD tends to reduce crude’s equilibrium price by lowering effective demand and expanding supply. While, by improving affordability and access (energy justice) and expanding clean, flexible substitutes (green funding), the system gains elasticity and buffers. The control variables, such as socio-economic conditions, have a positive impact, but the exchange rate has a detrimental influence on crude oil prices. This study provides insights into the development of energy justice and environmental policies by highlighting the intricate influencing factors and crude oil market price volatility in G20 economies for the green transition.

Suggested Citation

  • Ullah, Atta & Khan, Saba, 2025. "The interplay of energy justice, fossil fuel energy, and financial development with the moderating role of green investment funding on crude oil price fluctuations in G20 countries," Energy, Elsevier, vol. 339(C).
    • Handle: RePEc:eee:energy:v:339:y:2025:i:c:s0360544225045876
    DOI: 10.1016/j.energy.2025.138945
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