A changing energy system is posing “critical questions” for many of the world’s largest oil and gas producing countries, the International Energy Agency (IEA) says.
The rise of shale gas and oil in the US, global improvements in energy efficiency, and the response to climate change are leading to “sustained pressure” on countries that rely heavily on hydrocarbon revenues, it says.
In a new report, the IEA explores what these changing dynamics mean for six major oil-producing states and the consequences of a global push to meet climate change goals.
The report focuses on “producer economies”: large oil and gas producers which rely on hydrocarbon exports for a large portion of their national budgets.
Many of these countries are shown (in purple) in the chart, below. The report narrows in on six of these – Iraq, Nigeria, Russia, Saudi Arabia, United Arab Emirates (UAE) and Venezuela – chosen for their range of circumstances.
In these six countries, between 40% and 90% of government revenues come from oil and gas income. These earnings make up a similar share of the countries’ total exports.
This somewhat precarious position has been exposed by low oil prices since 2014. This has seen many of these countries facing recessions, falling incomes, budgetary deficits and even social unrest.
The “shale revolution” and long-term uncertainty over demand for oil and gas are “intensifying pressures for change” in these countries, the report says. It adds: