The transition towards green energy imperils oilproducing states that have lagged in diversifying their economies, United Kingdombased risk consultancy Verisk Maplecroft warned in a report on Thursday.
Algeria, Iraq and Nigeria will be among the first casualties of a slowmotion wave of political instability that will engulf an array of oil producing countries over the next 320 years as the energy transition takes hold, it said.
Other states facing the greatest risk include Angola, Gabon and Kazakhstan, it added.
With the move away from fossil fuels accelerating, and COVID19 levelling out any gains oil made over recent years … time is running out for a number of countries that have failed to diversify their economies away from exporting fossil fuels.
The outlook for the oil price by midcentury is deeply uncertain, Verisk Maplecroft said, and could lie within a broad range of anywhere between around 48 to 95 a barrel. Brent crude is currently trading around 63 a barrel.
The U.S. Energy Information Administration offers an even wider spread, predicting in its annual energy outlook last month a 2050 oil price of anywhere between 48 and 173 a barrel.
Though lowcost Gulf Arab oil producers are best placed to capture market share, they will not be immune from future shocks a prolonged downturn in prices could eat into foreign exchange reserves and domestic spending, undermining stability, the report said.
Even diversification could come with its own political risks…