{"id":39711,"date":"2018-10-26T06:48:46","date_gmt":"2018-10-26T11:48:46","guid":{"rendered":"http:\/\/olduvai.ca\/?p=39711"},"modified":"2018-10-26T06:48:46","modified_gmt":"2018-10-26T11:48:46","slug":"petro-states-face-extinction","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=39711","title":{"rendered":"Petro-States Face Extinction"},"content":{"rendered":"

Petro-States Face Extinction<\/a><\/h3>\n
\"oil<\/picture><\/div>\n
\n

Petro-states urgently need to begin diversifying their economies, shifting away from oil production, or else they face financial risks in the years ahead.<\/p>\n

That conclusion comes from the IEA\u2019s new report, \u201cOutlook for Producer Economies,\u201d which warns that a changing energy system threatens the economies of oil-producing countries. The threat comes in multiple forms, both on the supply side and on the demand side.<\/p>\n

Energy efficiency, electric vehicles and other technological changes raise questions about peak demand. Climate regulation also threatens to destroy consumption. On the supply side, U.S. shale could capture a bulk of any demand increase that might have otherwise been met by other oil producers.<\/p>\n

These factors pose serious threats to major oil producers, and the IEA focused on six countries: Iraq, Nigeria, Russia, Saudi Arabia, the UAE and Venezuela. All of those countries are significant oil producers and are overwhelmingly dependent on oil revenues to finance their budgets.<\/p>\n

That dependence is a risk during normal cycles. The IEA noted that Iraq saw its oil revenues plunge by 40 percent after the 2014 oil price meltdown, while Venezuela saw revenues fall by 70 percent. \u201cMajor swings in hydrocarbon revenue can be deeply destabilising if finances and economies are not resilient,\u201d the report said.<\/p>\n