What happened
A study by UK-based climate think tank E3G assesses how oil-producing countries could be affected as global demand weakens. It says countries that rely heavily on petroleum receipts for public services, have limited economic diversification and lack financial buffers face the greatest pressure.
Nigeria, Iran, Angola and Algeria are identified as particularly vulnerable. The study expects global oil demand to level off during the next decade and possibly reach its high point in the early 2030s. Producers would then compete for a smaller pool of buyers, with low-cost suppliers such as Saudi Arabia and the United Arab Emirates likely to have an advantage.
Oil accounts for more than 40% of state revenue in 17 countries. In Iraq and Libya, the share is between 70% and 90%. E3G expects income from oil to decline rapidly from 2030, including a projected 87% reduction for Algeria and a fall exceeding 60% for Nigeria.
Why it matters
The study says falling oil income could leave governments with large gaps in funding for essential services. Higher debt and weaker state capacity could follow, alongside risks of social unrest, conflict and migration if affected countries do not receive transition support.
The EU has a direct connection to the risks identified for Algeria. The study notes that Algeria is close to Europe and depends on the EU for almost all of its exports. It also points to potential consequences beyond individual countries, including instability in the Gulf, weaker state capacity in Nigeria and competition over oil infrastructure in Libya.
For policymakers and businesses exposed to oil-producing markets, the findings underline that demand-side change can create financial and security pressures where public budgets remain tied to petroleum exports.
Background
E3G spent two years preparing the research. Its work included scenario exercises on declining oil demand involving more than 100 public officials and experts from different countries.
The study argues that postponing or slowing the energy transition would not remove these risks. A delayed and disorderly shift away from oil could be at least as destabilising as a faster transition.
What's next
The report places 2030 as the point from which oil revenues could begin falling quickly in vulnerable producer economies. It calls for urgent support to help the most exposed countries adapt before fiscal pressure intensifies.
