New Analysis: Fossil Fuel Producing Countries Must Plan for a Future Beyond Oil and Gas or Risk Economic Crisis

ANTALYA, Türkiye, November 10, 2026 – Today at the COP31 UN climate talks, Oil Change International published a new analysis outlining how fossil fuel producing countries are impacted by the volatility of a global economy running on fossil fuels, and makes the case for these countries to develop credible government-led roadmaps to plan for a world of declining demand for their products.

As geopolitical conflict and disruptions to global energy markets send shockwaves through economies worldwide, fossil fuel producing countries are far from immune to the economic and social consequences of fossil fuel dependence. Governments must urgently develop credible, government-led roadmaps to diversify their economies through planning and industrial policy and facilitate a managed and fair transition away from fossil fuels, before declining demand and continued market volatility leave them facing painful economic shocks alongside climate breakdown.

The ongoing, worst-in-history energy crisis has deep repercussions on millions of households. Rising fuel prices drive escalating cost-of-living pressures around the world, while disrupted fertiliser exports from the Middle East and increasing diesel costs are pushing up food prices and threatening food security, particularly in already vulnerable countries.

Oil and gas producing countries are experiencing mounting pressures too. Iraq has seen its crude oil exports plummet and has reportedly lost $60 billion in revenues since the start of the U.S. and Israeli attacks on Iran. Nigeria, Africa’s largest oil producer and home to the continent’s largest refinery, continues to face a deep cost of living crisis driven by high fuel prices. Even in the U.S., the world’s largest expander, producer, and exporter of oil and gas, rising fuel costs are causing an affordability crisis for everyday people and surging fossil fuel exports and demand for gas-powered electricity to supply the AI data center boom are set to make this durably worse. While ordinary families shoulder the costs, the five largest international oil companies made $131 billion in profits in the first nine months of 2026.

A fundamental vulnerability is being exposed. Producing oil and gas does not shield countries from the economic and geopolitical risks of an energy system dependent on fossil fuels. While in the short term some oil and gas producing countries may be reaping revenues from the crisis, it would be unwise to assume the future will be smooth sailing. In fact, there are strong risks in delaying diversification away from fossil fuels.

At the same time, data shows the global energy transition is gathering pace. The Hormuz crisis reinforced the economic and security incentive for renewable energy electrification for importing countries seeking to reduce their dependence on volatile international fossil fuel markets. Data shows that increased electric vehicle sales since the start of the crisis have already displaced $20 billion worth of oil globally, and importing countries that deployed clean power generation since 2020 saved $36 billion, preventing bills rising further. Meanwhile, momentum is building for a global 35% electrification target by 2035 set to be adopted at COP31.

These developments could accelerate the peak and decline in global fossil fuel demand, leading to prices entering structural decline while retaining high volatility as supply and demand may fail to align in the short-term.

The Oil Change International analysis argues that fossil fuel producing countries cannot afford to keep waiting for these changes to unfold. They need credible, government-led roadmaps that provide a clear direction for their economies, identify the sectors they want to develop, establish how the transition will be financed, and address the systemic barriers that currently lock countries into fossil fuel dependence.

The briefing outlines four essential components of credible, government-led energy transition roadmaps for fossil fuel producing countries:

• A long-term vision for the country’s economy and energy system with clear targets
• Industrial planning to grow new, non-fossil fuel economic sectors
• A plan to unlock public finance for the transition
• International cooperation to dismantle systemic barriers to the transition, including reforming unfair global financial rules

Romain Ioualalen, Global Policy Lead at Oil Change International and briefing author, said: 

“Volatility is a feature, not a bug, of a global economy running on oil and gas. Decades of boom and bust cycles have demonstrated the risks of fossil fuel dependence, and in an era of escalating climate disasters, geopolitical conflict, and energy disruptions, those risks will keep growing. Fossil fuel producing countries only have two options: planning or chaos. Either start planning and investing in prosperity beyond fossil fuels, or risk being left with economies unprepared for the future. Governments must develop credible roadmaps rooted in equity and science, alongside plans to diversify economies and deliver the public finance needed for a fair and funded fossil fuel phaseout.”

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Notes to editor:

• Oil Change International data shows that rich country leaders can unlock $6.6 trillion (USD) per year in public funding to pay their fair share for climate action at home and abroad. By ending fossil fuel handouts, making big polluters pay, and taxing the super rich, governments can raise the public money needed for a global just transition to renewables and other urgent needs from healthcare to housing.
• Oil Change International research shows that existing fossil fuel extraction projects commit the world to emissions nearly seven times the size of the remaining 1.5°C carbon budget. Extracting all the oil, gas, and coal in existing fields and mines would lead to cumulative CO₂ emissions of 897 billion tonnes (Gt), whereas the world can emit a maximum of 130 Gt CO₂ from 2026 onwards for a 1-in-2 chance of staying below 1.5°C of temperature rise.