Experts predict that the world may be hit by very high oil prices in the coming months, with the conflict in Ukraine being a major force behind this.
Now hovering around US$100 per barrel, pundits are saying it can go beyond US$200. It is scary, but a real possibility if the conflict in Ukraine continues to escalate.
While much of the blame is on supply constraints, it does not exclude the fact that the voracious global appetite for oil has not changed much, despite the constant call to reduce oil consumption by climate activists.
Power generation and transport account for the largest share of demand. Talk about going electric for cars and switching power generation to renewables has not translated into reality as fast as expected.
This has to change if the world wants to avoid a fuel-driven economic catastrophe. The high oil prices have already led to increased gasoline prices in many countries.
Import-dependent countries have reported supply shortages, causing long queues at petrol stations. Countries that subsidise their fuel are seeing the inevitable rise in costs.
Here at home, the increased revenue that we hope to enjoy from the higher prices will be wiped out by subsidies as the world oil prices keep climbing.
And judging by the conflict in Ukraine, it seems extremely likely that oil prices may even exceed US$200 per barrel.
Economists are predicting dire consequences for a world economy that is till struggling to recover from the Covid-19 pandemic.
However, the high oil prices have started a new conversation on renewable energy. There is now more urgency to invest in renewables.
While oil is subject to price volatility, the opposite is the case for renewables, such as solar energy, wind and the like. Solar energy and wind are limitless, while oil faces threats of depletion.
The only cost we have to worry about for solar energy and wind is the conversion to power. But thanks to technological advancements, such costs have fallen.
They are always shunned when oil prices are low. But as we see today, in times of supply disruptions, oil prices would simply escalate. The only sure way of bringing down oil prices is to reduce the world's dependency on oil.
What is clear is that high oil prices do much harm to an economy that is addicted to the resource. Once that addiction is removed, the economy will be spared from the volatility and the pains associated with it.
Investing in alternatives to oil, including solar energy, wind, geothermal energy and even the emerging ocean thermal energy, is what the world needs. The shift to electric mobility should not be delayed.
All the necessary infrastructure to support electric transportation must be given priority. The costs of such infrastructure would be minimal compared with the economic costs of high and volatile oil prices.
It is time that the world reduced the role of oil in fuelling the global economy. If we factor in the impact of oil on the global climate, the investment in renewables becomes even more attractive.
We all know how global warming has changed the world's weather patterns. Extreme weather events have become more common.
At home, we have witnessed how floods have hurt lives and livelihoods. The floods have also become more unpredictable, taking us by surprise.
Landslides and damage to basic infrastructure have cost the economy greatly. The decision to embrace the "Net Zero" carbon emissions plan is definitely wise.
But we must act fast. There is no time to waste if we are to avoid the economy going into a downward spiral due to high oil prices. The oil deposits that we have will not be there forever.
Remember, oil is a depleting resource. The message is clear. The current high oil prices, which experts predict will move higher, are a wake-up call for the world.
Switching to renewables is no longer just an option. It is a do-or-die decision for the world economy.
The writer is a professor at the Tan Sri Omar Centre for STI Policy, UCSI University
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times