Interplay between metal and oil markets in the renewable energy transition: An internal and external connectedness perspective

This study investigates the information spillover between critical metals and oil markets within the context of the global transition to renewable energy. Metals such as copper, aluminum, cobalt, nickel, and zinc are essential for renewable energy technologies, and their price movements are closely linked to energy markets. Using the connectedness decomposition approach, this study analyzes internal and external information flows between metal and oil markets. The findings reveal that copper and aluminum are the strongest information transmitters, while oil prices, particularly Brent and WTI, become more sensitive to metal markets during crisis periods. As the energy transition accelerates, critical metals are playing an increasingly influential role in commodity markets, shaping energy price dynamics. These results provide valuable insights for sustainable energy policies and risk management strategies, emphasizing the growing interdependence between energy and metal markets.