The oil endgame is a security issue, not just a market or climate agenda, shows a new report from independent climate think tank, E3G. Published today, the insights from extensive scenario analysis and simulation reveals that as demand weakens, producer fragility, chokepoint exposure, sanctions fragmentation and more transactional security deals will determine whether the transition produces stability or disorder. Falling and more volatile oil revenues will put many producer countries under macro-financial pressure, with consequences that can spill across borders.
Nick Mabey, CEO and Founder, E3G, said:
“It was a Saudi oil minister who said the Stone Age didn’t end because we ran out of stone. Now it’s the end of the Oil Age, and E3G’s war-gaming shows that it won’t go quietly. Importer countries must cooperate on exit plans and rapidly shift to clean, sustainable renewables if they want to avoid the worst of the disorderly transition from oil producing countries facing the terminal decline of oil demand.”
E3G shares five key findings for importer country governments in its new research report Playing the Oil Endgame: Oil producers and the politics of declining demand which can be found at this link: https://www.e3g.org/publications/oil-endgame-geopolitics-declining-demand/ from 01.00 on 8 September 2026.
Michael Bradshaw, Professor of Global Energy, Warwick Business School, said:
“Although the world hopes for an orderly, just transition away from fossil fuels, reality will be messy and disorderly. This timely report is an essential guide to the contours of the high-carbon transition as oil demand falls, examining key vulnerabilities and measures to minimise disorder and conflict.”
Find out more
A public webinar will take place on Wednesday 9 September 11.00-12.00 BST (GMT +1).
The oil era won’t end quietly
- The oil endgame is already underway. Long before global oil demand peaks, governments, companies and markets are positioning for a future in which demand is more uncertain, and competition for remaining markets is intensifying.
- E3G’s Oil EndGame research and simulation show that unmanaged decline in oil demand – and the volatility it creates for producer countries – can trigger cascading risks across markets, finance and security, significantly impacting importer economies.
- Managing this decline is a shared international challenge. Major importers, producers and financial institutions have significant power to steer away from disorder. Clearer demand signals, economic diversification, finance and producer–consumer cooperation are paramount, but governments are not yet using these tools as part of a coherent oil-security strategy.
- The world does not yet have a serious architecture for managing oil decline. Managing the way down will require coordinated action between producers, consumers and international financial institutions to reduce disorder, support credible alternatives and avoid wider geopolitical spillovers. Both producing and importing countries, along with international financial institutions and other players, will need to cooperate to avoid wider ramifications and major demand powers such as China and India, along with the US and the EU, will have a role in shaping this pathway.
Five key findings from the Oil EndGame simulation
Oil producer fragility is the next global security risk
In a world of declining demand, producer fragility is a more pressing security risk than oil scarcity. Countries may become less important as suppliers as they are priced out of a shrinking market, while the loss of oil rents still transmits through debt, migration, conflict, regional instability and the wider global economy. Oil and gas generate more than 40% of government revenue in 17 producer countries, and as much as 70-90% in countries including Iraq, Libya, South Sudan, Kuwait and Oman.
The first shocks may hit budgets and debt before barrels
In a demand-led oil decline, the risks of declining or volatile oil revenues are transmitted through sovereign finance, exchange rates, investor confidence, national oil company transfers and public spending.
Producers won’t go quietly – they will act strategically
In the simulation, uncertainty pushed producers towards short-term revenue maximisation, output expansion, buyer lock-in and more transactional geopolitical deals.
As demand power increases, China, India, the EU and the US all hold cards
Demand powers will increasingly shape the terms of market access and determine which barrels remain marketable, financeable, insurable and politically acceptable.
Oil security is no longer only about barrels: Chokepoints, sanctions, insurance and market access are now national security considerations
In the oil endgame, security is no longer only about who has the barrels. It is increasingly about whether they can be shipped, refined, insured, financed and sold. Chokepoints still matter, and also, sanctions, insurance, shipping transparency, payments and market-access rules are becoming strategic tools that can either stabilise oil trade or fragment it further.
Available for comment
Maria Pastukhova (DE, EN), Programme Leader, Global Energy Transition, E3G | maria.pastukhova@e3g.org | +49 (0) 160 901 67735 [in person at UNGA/CWNY]
Beth Walker (EN), Senior Policy Advisor, Global Energy Transition, E3G | beth.walker@e3g.org |m: +44 7827 9668038 |
Charlotte Liebrecht (EN), Policy Advisor, Global Energy Transition, E3G | charlotte.liebrecht@e3g.org | m: +32 490 11 33 19(At UNGA/CWNY from 21/9) Leo Roberts (EN), Associate Director, Energy Transition, E3G, | leo.roberts@e3g.org | m: +44 (0) 7908 664 334
For further enquiries email press@e3g.org or phone +44 (0)7783 787 863.
