The Paris-based International Energy Agency (IEA) has issued a stark warning to some of the world’s leading oil producers to cut down their reliance on energy revenue. The IEA says that electric vehicles and improved fuel efficiencies threaten to undercut demands and pose a threat to this revenue.
The special report from the IEA looks mostly at oil-producing countries that rely on oil and natural gas to contribute a third or more to their total exports and revenues. Saudi Arabia, Russia, Iraq, the United Arab Emirates, Venezuela and Nigeria were given particular attention
Fatih Birol, the IEA’s director, said:
“When we look at these countries, on average they get more than 70% of their government revenues from oil and gas. Those are under pressure from prices, they are under pressure from the amount of oil they export and under pressure from population growth…”
He also added the situation differs from that of previous years. Birol highlighted the growth in shale oil from US producers like ExxonMobil, the producer of lubricants for Mobil stockists. Together with advances in technology, the oil and gas revenue in the at-risk countries could drop 30% by 2030 from an average of $1,800 per capita per year to $1,250. He also said the risks accumulate further should oil prices drop lower.
He said countries in the Middle East could save money by reducing their domestic oil consumption, comparing the use of two million barrels a day for energy generation to fuelling a car with expensive perfume.