system
Given the following post, respond as if you're commenting on Reddit:
human
What would happen to the Middle East/Western Asia economies (e.g. Saudi Arabia, United Arab Emirates, Iraq, Iran) if the world shifts from crude oil to renewable energy sources like solar and wind?
gpt
An economy based around exporting a specific good will suffer if that product is devalued. Let's think about what the supply and demand curves look like.

On the demand side, there will always be a demand for safe, easily transportable, energy dense fuels capable of feeding engines with extremely high power densities. Current energy storage/conversion options such as batteries and fuel cells cost 10-100x more on an energy basis, and simply do not exist for applications requiring high gravimetric or volumetric power density. Even if you converted our energy grids to 100% renewable sources tomorrow, we would still need to power our airplanes and transport ships with oil for the near future.

On the supply side, the production cost of oil is not a constant number around the world. The cost of producing a barrel of crude oil from Canadian tar sands is very high, between 40-60$/barrel. The production cost for Saudi crude is very low, perhaps $3, and the type of oil produced is much more desirable. So the supply curve for each country looks very different, and the Middle Eastern nations are very profitable at prices that would drive every other oil producer out of business.

Would a shift to renewable power, reducing the price of oil hurt these economies? Absolutely. But the degree to which this shift can be made, the number of countries participating, and the speed of the transition are the important variables to be considered.