Renewable Energy and Crude Oil Price Volatility in the U.S.

The volatility of oil prices poses significant risks for economic stability, energy planning, and climate policy, particularly as the United States transitions toward renewable energy. While prior research has examined how geopolitical and economic forces drive oil price volatility, fewer studies have evaluated the potential moderating role of renewable energy adoption. This paper aims to investigate whether increasing renewable energy consumption is associated with reduced oil price volatility in the U.S. A dataset was constructed from 2002 to 2021 using sources including the U.S. Energy Information Administration, FRED, the World Bank, and Our World in Data. Key variables include WTI oil prices; renewable energy consumption; crude oil production, consumption, imports, and stocks; GDP growth; and the Geopolitical Risk Index. OLS regression, Random Forest, and Logistic Regression models, as well as elasticity calculations for oil supply and demand were applied. The results show that traditional oil market fundamentals remain the most predictive of volatility, while renewable energy consumption has a weak and statistically insignificant effect. Correlation and regression analyses also reveal no strong relationship between renewable energy share and crude oil market elasticities. These findings suggest that although renewables are expanding, their ability to stabilize oil markets is not yet realized, with implications for policymakers seeking energy resilience through diversification.