Energy transition threatens major revenue losses for Algeria and Nigeria

A report by the think tank E3G warns that the global transition away from oil could trigger significant economic upheaval, conflict, and migration if governments do not assist vulnerable nations. As global oil demand is forecast to plateau and potentially peak in the early 2030s, countries heavily dependent on hydrocarbon revenues face severe risks.

Algeria could see its oil revenue decline by as much as 87%, while Nigeria could lose more than 60%. These nations, along with Iran and Angola, are identified as particularly vulnerable due to limited economic diversification and insufficient capital to cushion the transition. While low-cost producers like Saudi Arabia and the United Arab Emirates may remain competitive, nations with less advanced infrastructure face greater instability.

The research emphasizes that producer fragility poses a global security risk. Experts suggest that leaving oil markets to manage themselves during this contraction could lead to chaotic outcomes, though they note that slowing the energy transition is not a viable solution due to the worsening climate crisis.