Hi, it’s konkaz (@konkazuk).
When it comes to discussions on climate change, the term “fossil fuels” almost always comes up. And if you read articles on fossil fuels, you’ll sometimes see the word “Petrostate” mentioned.
In this article, we’ll have a look at what the term “Petrostate” means and the countries that fall into this category.
What is “Petrostate”?
The term “Petrostate” emerged in the late 20th century as a coined word combining “Petroleum” (oil) and “State” (nation).
Since the oil shocks of the 1970s, people have become more aware of how much oil resources impact national power and economies, leading to the spread of terms like this.
The definition of a Petrostate is・・・
a country whose economy heavily depends on the export of oil and natural gas.
In Japanese, “Petrostate” is sometimes translated as “oil nation,” but a more accurate term would be “oil-dependent nation“.
The greater a nation’s reliance on resources, the more vulnerable its economy and politics become to price fluctuations.
The World’s Top 10 Oil-Dependent Nations
Here, we will highlight the top 10 Petrostates where oil resources have a significant impact on the economy and politics.
We will also explore how dependent each country is on oil and how far they have progressed with climate action.
No.1 Saudi Arabia
Undoubtedly one of the biggest oil-exporting nations in the world, it also faces significant greenhouse gas emissions from fossil fuels.
Due to the fact that oil accounts for the majority of national income, fluctuations in crude oil prices have a direct impact on the country’s finances.
Given this context, the country has recently aimed to diversify its economy, focusing on developing industries beyond oil, such as tourism, entertainment, and finance, with the goal of increasing the share of non-oil sectors in GDP (Vision 2030 ).
Although interest in renewable energy is rising, the country still remains strongly dependent on oil.
No.2 Russia
A typical Petrostate where oil and gas account for most of the national income.
When these prices rise, the economy flourishes, but when they fall, the finances become strained.
The sharp decline in oil prices during the 2020 pandemic and the sanctions imposed after Russia’s invasion of Ukraine in 2022 led to a major setback for the Russian economy.
Russia is the world’s fourth-largest emitter of greenhouse gases, largely due to its oil and gas industries.
While not widely covered in the news, massive wildfires frequently occur in Siberia, releasing vast amounts of CO₂.
The country’s stance on climate action remains negative.
No.3 Iran
As a typical Petrostate, Iran derives the majority of its national income from oil and natural gas exports.
However, since the U.S. accused it of developing nuclear weapons, the country has faced prolonged international sanctions, significantly restricting its export capabilities.
As a result, the country’s economy and political situation remain unstable, leaving little room to focus on climate action.
No.4 Iraq
Over 90% of the country’s national revenue comes from oil exports, making its economy entirely dependent on oil and natural gas.
In the past, Saddam Hussein’s regime in Iraq aligned with the U.S., which opposed Iran. However, relations soured after Iraq invaded Kuwait in 1990, ultimately leading to the U.S. invasion of Iraq in 2003.
The U.S. and the U.K. insisted that Saddam Hussein’s regime possessed weapons of mass destruction and had links to al-Qaeda. However, no evidence was found. Under the justification of “freeing the Iraqi people from a dictatorship”, Iraq was left in ruins by war.
Moreover, the failure to establish a proper post-war recovery plan led to the collapse of governance, allowing militant groups like ISIS to rise. Short-term power struggles have continued ever since, leaving no room whatsoever for climate action.
No.5 Venezuela
Over 90% of the country’s national revenue depends on oil.
Venezuela was once among the wealthiest nations in South America, but after the 2014 oil price crash, hyperinflation took hold, leading to economic collapse.
Moreover, due to poor management of the oil industry, oil spills and environmental pollution have become commonplace. (In Lake Maracaibo, oil spills have caused severe water contamination and devastating damage to fisheries.)
Additionally, there has been little investment in renewable energy, and the country has shown little interest in addressing climate change.
No.6 Nigeria
It is the largest oil producer in Africa, with over 90% of its national revenue relying on oil exports.
Like other petrostates, it suffered severe financial blows from the 2014 oil price crash and the economic downturn caused by the COVID-19 pandemic in 2020.
Corruption and embezzlement surrounding oil revenues are rampant, with most of the profits concentrated in the hands of the government and elite. Meanwhile, many citizens remain trapped in poverty.
Moreover, the practice of gas flaring, where natural gas is burned off without proper treatment, is widespread, leading to significant emissions of CO₂ and hazardous pollutants.
Additionally, as climate change has led to frequent flooding, endangering public health and livelihoods, the government continues to depend on oil profits, making little progress on climate action.
No.7 Qatar
Qatar is not only one of the largest exporters of oil but also one of the biggest exporters of natural gas, particularly liquefied natural gas (LNG), with the natural gas industry accounting for about 60% of its GDP and 70% of national revenue.
Compared to other oil-dependent countries, its financial base is more stable, and the country strategically allocates its substantial natural gas revenues towards international investments and infrastructure projects to develop a more adaptable economy.
While wealth is distributed among Qatari citizens, the harsh working conditions of migrant laborers are frequently criticized as a serious issue.
In terms of climate action, the country has only recently started making progress in adopting renewable energy, with the government aiming to ensure that 20% of all energy comes from renewable sources by 2030.
No.8 Kuwait
About 90% of the country’s revenue depends on oil exports.
Unlike other Gulf nations like Saudi Arabia and the UAE, economic reforms have been slow, hindering the development of new industries driven by oil revenues.
The government often clashes with the parliament over the allocation of oil revenues, resulting in the failure to pass budgets. As a result, investments in economic diversification and renewable energy have been delayed.
No.9 United Arab Emirates (UAE)
The UAE is significantly reliant on oil and natural gas exports, and Abu Dhabi plays a central role, producing most of the country’s oil revenue.
However, unlike other typical petrostates, the UAE has promoted economic diversification from an early stage. By actively reinvesting oil revenues into growing sectors such as tourism, finance, and trade, it has successfully diversified its economy.
In recent years, the UAE government has been actively promoting a transition to renewable energy. To achieve net-zero emissions by 2050, it has pledged to invest over 163 billion USD in clean and renewable energy over the next few years and to triple its renewable energy production capacity by 2030.
However, given what transpired at COP29, it remains unclear to what extent we can trust the effectiveness of the UAE’s efforts toward renewable energy.
No.10 Algeria
Algeria is the largest natural gas exporter in Africa, with oil and natural gas accounting for about 90% of its national revenue.
With much of its land covered by desert, the country is particularly vulnerable to climate change, facing severe droughts, water scarcity, and wildfires. In 2021 and 2022, record-breaking heatwaves and droughts led to massive wildfires.
In 2020, the Algerian government set a goal of increasing renewable energy to 27% of the total by 2030. However, it has been pointed out that without changes to the political system and economic structure, moving away from fossil fuels will not be easy.
Are the Top 10 Oil-Dependent Nations Different from the Top 10 Oil Producers?
The list of the top 10 “oil-dependent countries” differs from the ranking of the top 10 “largest oil-producing nations”.
Some countries have high oil production but a diversified economy, making them less dependent on oil revenues.
On the other hand, some countries do not produce much oil but still rely heavily on oil revenues due to their economic structure.
Below is the ranking of the top 10 oil-producing countries, based on data from October 2023. 👇
1. United States: approx. 20.3 million barrels per day
2. Saudi Arabia: approx. 12.44 million barrels per day
3. Russia: approx. 10.13 million barrels per day
4. Canada: approx. 5.83 million barrels per day
5. Iraq: approx. 4.61 million barrels per day
6. China: approx. 4.45 million barrels per day
7. United Arab Emirates (UAE): approx. 4.23 million barrels per day
8. Iran: approx. 3.67 million barrels per day
9. Brazil: approx. 3.17 million barrels per day
10. Kuwait: approx. 3.01 million barrels per day
*One barrel is equivalent to approximately 159 liters.
As you can see, developed countries such as the United States and Canada are also on the list.
In addition to these facts, considering Noam Chomsky’s perspective on U.S. dominance in the Middle East in his book ‘Who Rules the World’, there is much to reflect on.
Unfortunately, under a national structure reliant on oil, it’s unclear whether these nations have the capacity to adapt to climate change.
That wraps up today’s article on “Petrostate“.
See you next time.
konkaz
*You can read this blog post in Japanese from the link below.
👉 “Petrostate”の定義と世界の石油依存国トップ10を解説