Petrostates' Economic Collapse as Fossil Fuel Demand Declines
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Elevator Pitch
Oil-dependent nations face severe economic and geopolitical instability as global demand for fossil fuels wanes and regional conflicts threaten supply, necessitating a rapid transition to alternative energy sources.
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The Petrostates were already facing the prospect of fossil fuels' decline before the 2026 war started; now, events may accelerate fossil fuels' decline. Iran may have many times more cheap drones and missiles than the expensive systems the US, Israel & Gulf states need to neutralize them. At $20-50k each, it can build 5,000 or so per $100 million and has been preparing for years. Soon, when those expensive defences run out, 20% of the world's fossil fuel production may be at Iran's mercy and defenceless from its drones and missiles.
The rest of the world may be forced to adapt to a world of permanent high oil & LNG prices. Unlike the last time this happened in the 1970s, this time there is an alternative. Renewables, batteries, and EVs were already cheaper before the 2026 Middle East War; they will be vastly cheaper as it goes on. Iran may have enough cheap missiles to last months, or possibly years. By the time they run out, the Gulf states may find the rest of the world has adapted away from needing them so much.
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From the Reddit thread(12 top comments)
- 198·Reddit commenter·1mo ago
Funny timing with how the trump administration has been pushing the US back into an oil dependency when Biden had laid a path into renewables. Kinda handy to have other options but we instead elected to shoot ourselves in the foot yet again
permalink ↗ - 131·Reddit commenter·1mo ago
See what I don't understand about the Petro States is that they should be the ones investing in clean energy the most. They have capital they should turn into investments in the future. If they went to clean energy and with their market power they could turn their oil supply outward thereby increasing foreign capital exchange to further buy foreign assets. Basically if they used less oil they could export more oil and Increase the amount of time and they can extract and have better price control of the market.
permalink ↗ - 111·Reddit commenter·1mo ago·reply
A company will go bankrupt before changing their business plan. Countries are no different.
permalink ↗ - 72·Reddit commenter·1mo ago·reply
>>Funny timing with how the trump administration has been pushing the US back into an oil dependency Yes, but this can only work for so long. Already, for other countries fossil fuels are coming to be seen as associated with unwanted dependency, weakness, and global instability. Soon, they will also be associated with being technologically underdeveloped and backward. China, with renewables, is the one with the winning story. By the 2030s, more and more Americans will come to view fossil fuel technology as part of their weakness vis. a vis. China.
permalink ↗ - 69·Reddit commenter·1mo ago
I'm working from memory here, but Matt Damon was in a movie about the middle east. I remember him saying to a local person, "I think 150 years ago your ancestors were living in tents and 150 years from now so will your descendants, but yeah, I'll take your money". At the time I thought it was prophetic. Now I'm sure it was, only I don't think it'll take 150 years.
permalink ↗ - 36·Reddit commenter·1mo ago
If every passenger car was an EV, the military would still use JP5/kerosene, and also the plastics industry would use a variety of petro-feedstocks. Lots of fertilizers use ammonia as a nitrogen source, and the majority of ammonia is made from natural gas. I could go on, but the petro-states will still be in business, but at a lower volume of sales.
permalink ↗ - 32·Reddit commenter·1mo ago·reply
They are? The UAE has some of the biggest solar plants projects under construction, on par with China's - they have a 75% Solar-for-domestic-consumption target for 2050, and Qatar and Saudi Arabia, *while* currently trailing, have started to ramp up their solar efforts now that construction prices have gone significantly down.
permalink ↗ - 27·Reddit commenter·1mo ago·reply
\>and the majority of ammonia is made from natural gas. It's made from hydrogen, and the hydrogen is made from fossil gas. You can replace that step though, and give China another 5 years, it will probably be cheaper to make the hydrogen with electricity anyway. I'm not sure why everyone is discounting food shortage from climate change either...nobody's predictions matter fuck all when the first hunger event occurs.
permalink ↗ - 20·Reddit commenter·1mo ago
Also, the United States is selling the "old solutions" or more fossil fuels, high end (and expensive) defense systems and now with Trump, fealty to the United States in all things. In an ironic twist, it is China, with low cost solar and battery storage, that is now selling countries independence, self determination, freedom from bondage to the Petrostates. Just like countries saw that atomic weapons brought security to North Korea and Pakistan, they are seeing that locally produced renewable electricity provides freedom from oil wars.
permalink ↗ - 14·Reddit commenter·1mo ago
All fossil fuels are VERY EXTREMELY expensive. What you pay at the pump or to the utility company is only a small fraction. Not obvious is the billions in govt. handouts and tax breaks to the fossil fuel corporations every year, and in addition comes the health cost of dealing with respiratory, heart, brain, allergies and more that the healthcare industry extracts vast profits from our pockets. Its a setup and you're the clown. To solve nearly all our funding issues, the govt. needs to tax the fossil fuel industry at 90% like they do in Norway, and put the proceeds in a national wealth fund …
permalink ↗ - 14·Reddit commenter·1mo ago·reply
Norway went full ahead with electrification. One of the reasons was to export as much as possible oil and gas while inside the country use cheap and abundant hydro.
permalink ↗ - 13·Reddit commenter·1mo ago
New energy, more water, future cities that deal with their temperatures, future farming.
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