Global move away from oil could lead to conflict and migration, experts say
Researchers urge governments to help worst afflicted countries, such as Nigeria and Algeria, which rely on oil revenues for public services
TL;DR
- The global transition away from oil is expected to trigger conflict, migration, and economic upheaval, especially in countries heavily dependent on oil revenues.
- Nations like Nigeria, Iran, Angola, and Algeria are at high risk due to their lack of economic diversification and limited capital to absorb the shock of declining oil demand.
- Global oil demand is projected to peak in the early 2030s, forcing producers to compete for a shrinking market.
- Governments are largely unprepared for these outcomes, and leaving oil producers to adjust alone creates global security risks.
- Slowing the energy transition is not a solution and could be as destabilizing as a fast but chaotic transition, given the worsening climate crisis.
- Countries in the North Sea region with high operating costs may also become economically unviable as demand and prices fall.
- Significant drops in government revenue are forecast for countries like Algeria (87%) and Nigeria (over 60%) by 2030.
- These revenue shortfalls could lead to social destabilization, increased debt burdens, unrest, migration, and geopolitical competition.
- International cooperation involving organizations like the IMF, World Bank, private institutions, and governments is necessary to manage the transition.
- Clearer communication from major oil-consuming nations about their future demand is needed, integrating adjustment strategies into foreign and economic security policies.
- China's oil consumption is declining, while India's future direction could be pivotal in determining the severity of the impacts.