PETRO-STATES AND ELECTRO-STATES: THE GEOPOLITICS OF ENERGY IN THE AGE OF TRANSITION

MARIA VINCENZA CHIRIACO’

CMCC Foundation – Euro-Mediterranean Centre on Climate Change

RICCARDO VALENTINI

University of Tuscia

1. Introduction

For much of the 20th century and the early decades of the 21st, fossil fuels — oil, natural gas and coal — were the lifeblood of the global economy. The political and economic power of many states was directly proportional to their capacity to extract, export and sell hydrocarbons. These countries, defined as petro-states, built economic models based on fossil fuel rents, using oil as the main lever of international influence and domestic accumulation.

In recent years, however, the rapid development of renewable technologies and the growing urgency to tackle climate change have given rise to a new, emerging category of national power: the electro-states, namely countries that base their development strategy on the production of electricity from clean sources and on the capacity to innovate in the electrification of industry, transport and grid systems. This transformation is not merely technological: it is profoundly geopolitical, and is redefining alliances, rivalries and roles within the international community.

 

2. Petro-states: Dependencies and Fragilities of the Fossil Fuel Model

Petro-states — including Saudi Arabia, Russia, Iran, Iraq, Kuwait, Venezuela and Nigeria — have developed over decades thanks to the substantial revenues generated by the export of oil and gas. In these countries, revenue from the energy sector accounts for a dominant share of GDP, the state budget and total exports. This dependence has generated political systems often characterised by rentier economies, with low levels of productive diversification and marked exposure to fluctuations in global hydrocarbon prices.

The geopolitical leverage of the petro-states is manifested through bodies such as OPEC (Organisation of the Petroleum Exporting Countries), which is capable of influencing global crude oil prices through the management of production quotas. For decades, this mechanism has been a crucial tool in international relations, with repercussions extending from energy markets to diplomatic relations with the major importing powers — the United States, the European Union, China and Japan.

However, the petro-state model is showing increasing fragility: the growing competitiveness of renewable energy, the structural decline in the cost of clean electricity and international pressure for a gradual phase-out of fossil fuels are undermining the long-term sustainability of economic systems still based almost exclusively on hydrocarbons.

 

3. Electro-states: The New Geopolitics of Clean Energy

The emerging counterpart to this model is represented by electro-states. These countries do not merely produce electricity from renewable sources, but aim to dominate key clean energy technologies: smart grids, energy storage systems (batteries and storage), green hydrogen, electromobility and the digitalisation of energy systems. Three paradigmatic cases illustrate the different trajectories at play.

China is one of the most significant examples of this strategy. Whilst remaining one of the world’s largest consumers of coal, Beijing has invested heavily in renewable energy, in controlling the supply chains of critical materials — such as lithium and rare earths — and in developing advanced grid infrastructure. From the production of photovoltaic panels to that of batteries and electric vehicles, China is building a structural competitive advantage that goes beyond mere energy generation. Its strategic goal is to become a global hub of the electrified economy, whilst reducing its vulnerability to oil imports.

The European Union, although not a single state, represents a geopolitical bloc increasingly focused on electrification, with ambitious clean energy targets and regulations aimed at drastically reducing emissions and promoting the transition to electricity across all economic sectors. European progress in reducing the share of fossil fuels in the electricity mix demonstrates that the shift towards advanced energy models is not only desirable but already underway in several mature economies.

The United States represents a hybrid and particularly complex case. Since the 2000s, the shale oil and shale gas revolution — made possible by new deep-rock extraction techniques — has transformed the US into one of the world’s leading producers of hydrocarbons, reducing the need for energy imports and strengthening the country’s geopolitical standing as an exporter of fossil fuels. During the Trump administration, this dynamic was further accentuated: the active promotion of fossil fuels, the easing of environmental constraints and the withdrawal of federal support for multilateral climate policies outlined the vision of an ‘energy-dominant’, oil-oriented America. The US withdrawal from the IPCC, the UNFCCC and the Paris Agreement, and its consequent absence from COP30 in Belém, represent an explicit shift away from global climate policies, fuelling interpretations of political convergence with oil-producing powers such as Russia and Saudi Arabia and helping to shape what some analysts describe as an ‘axis of obstruction’ in international climate negotiations. At the same time, at a technological and industrial level, the United States remains one of the world’s driving forces behind innovation in electrification and clean technologies, with leading players in the renewable energy, semiconductor, battery and smart grid sectors. This duality reflects a structural tension between the fossil fuel legacy and the drive towards the energy transition, fuelled by domestic political dynamics and the influence of sectoral lobbies.

 

4. Energy Leapfrogging

A concept of growing relevance in the debate on the global transition is energy leapfrogging: the possibility for developing countries to bypass the historical stages of development based on fossil fuels, adopting advanced and clean energy technologies directly — from widespread solarisation to storage systems, right through to decentralised grids. This type of technological leap has clear precedents in other sectors: in telecommunications, numerous countries lacking fixed networks have adopted mobile telephony directly, skipping entire stages of infrastructure development. As a paradigm, leapfrogging capitalises on transitions already achieved elsewhere to avoid experimental phases and costly structural errors, aiming directly for the rapid roll-out of more advanced and efficient solutions. In this way, it can help reduce technological and environmental inequalities, accelerating the positioning of those countries aspiring to become ‘electro-states’ in the new energy landscape.

Africa, much of Asia and Latin America possess abundant natural resources for renewable energy production — solar, wind and hydroelectric. These regions could potentially avoid replicating the path of industrialised economies, bypassing fossil fuel infrastructure and technological lock-ins to move directly towards cleaner, distributed energy systems. However, this leap is not automatic: effective leapfrogging requires technology transfer, robust institutional capacity, effective governance and adequate financial capacity. Without technical expertise, institutional strengthening and appropriate financial instruments, there is a risk that the potential will remain untapped or that the transition will be driven from the outside, reproducing new forms of structural dependence.

It is within this framework that international cooperation plays a decisive role. Adequate global financing for the energy transition can make all the difference: if well-structured, it can enable emerging countries not only to decarbonise their systems but also to actively redefine their role in the global energy economy.

 

5. COP30 in Belém: Outcomes and Geopolitical Implications

COP30, held in Belém under the Brazilian presidency in November 2025, marked the tenth anniversary of the Paris Agreement. From a negotiating perspective, the conference highlighted the tensions between oil interests and the transition agenda, embodying a profoundly dual nature — exemplified by Brazil itself, a key country for forest conservation yet at the same time an active oil producer.

Hosted in the heart of the Amazon and billed as the ‘COP of the forests’, the conference saw active involvement from local communities and civil society, in stark contrast to the three previous COPs hosted in oil-producing nations such as Egypt, the United Arab Emirates and Azerbaijan, where public demonstrations were effectively barred. However, the final text did not include binding commitments on either forest protection or the phase-out of oil, gas and coal, reflecting resistance from the oil-rich nations.

Among the positive outcomes, it is worth noting the agreement on a substantial increase in funding for climate adaptation, with a commitment to triple available resources by 2035, alongside significant commitments to the expansion of renewable energy, transmission infrastructure and equitable access to energy in developing countries. If effectively implemented, these measures could create the conditions for leapfrogging processes, enabling many emerging economies to integrate more rapidly into the new clean energy economy, with potential rebalancing effects on current global energy hierarchies.

On the geopolitical front, COP30 confirmed a still deep divide between those seeking to preserve the fossil fuel model and those pushing for an acceleration towards clean energy and electrification. Its outcomes reflect the ongoing competition between petro-states intent on defending their role and electro-states aspiring to lead the new global energy economy; at the same time, they open up scope for a gradual rebalancing of investment in energy production, with a more widespread and potentially fairer distribution of resources and opportunities linked to renewables and storage and transmission technologies.

 

6. Advanced Nuclear Power and Thorium: Towards Structural Energy Autonomy

Alongside renewable energy, a second technological frontier is poised to redefine the landscape of global energy dependence: next-generation advanced nuclear power. Whilst third-generation reactors (Gen III+) represent a significant evolution compared to previous models in terms of safety and efficiency, it is in the field of fourth-generation technologies (Gen IV) and Small Modular Reactors (SMRs) that the greatest strategic attention from governments and international investors is currently focused. SMRs, with a capacity of less than 300 MWe, are characterised by their modular design, low construction costs, the possibility of installation in remote locations, and higher levels of passive safety than large traditional plants. Countries such as the United States, Canada, the United Kingdom, South Korea and China are already funding advanced development programmes, whilst several emerging economies view them as a viable path towards energy self-sufficiency.

Among fourth-generation technologies, the thorium cycle is of particular geopolitical significance, and specifically molten salt reactors (MSRs), with the most widely discussed prototype being the Liquid Fluoride Thorium Reactor (LFTR). Unlike conventional reactors that use enriched uranium, these systems utilise thorium-232 as a fertile material, converting it into fissile uranium-233 through neutron irradiation. The process significantly reduces the production of plutonium and long-lived waste, and offers superior inherent safety features in certain plant configurations: in the event of a fault, the reactor tends to shut down automatically due to physical effects, without the need for active intervention. India is the country that has invested most systematically in this technology, possessing some of the world’s most abundant thorium reserves and having pursued for decades a three-phase nuclear programme specifically geared towards exploiting the thorium cycle. China has also launched a research programme on MSR reactors at the Shanghai Institute of Applied Physics, with the aim of operating a prototype within the current decade.

The most significant factor from a geopolitical perspective, however, concerns the geographical distribution of resources. Unlike uranium — whose global production is concentrated in a few countries: Kazakhstan (around 43% of global production), Canada, Namibia, Australia and Uzbekistan, with a significant Russian presence in the refining and enrichment chain — thorium is present in significant quantities across a much wider range of countries. The largest estimated reserves are found in India (~25%), Brazil, Australia, the USA, Egypt, Turkey, Venezuela and Norway. This geographically wider distribution implies that an energy system based on the thorium cycle would structurally reduce the geopolitical concentration of energy resources, taking away bargaining power from the countries that currently control the uranium supply chains and opening up the possibility for a far greater number of countries to develop autonomy in their energy mix.

In terms of physical availability, thorium is three to four times more abundant than uranium in the Earth’s crust and is often present as a by-product of the extraction of rare earths and minerals such as monazite, which further lowers its procurement cost. The energy efficiency of the thorium cycle is also superior: one kilogram of thorium can theoretically produce energy equivalent to that of approximately 200 kilograms of natural uranium or 3.5 million kilograms of coal. These characteristics make thorium particularly attractive to countries that possess their own reserves but lack access to uranium enrichment chains, historically controlled by a select group of nuclear powers.

Despite these promises, however, a balanced analytical approach must be maintained. MSR and LFTR technologies are still, in most cases, at the advanced research and development or prototyping stage: no thorium molten salt reactors are currently in commercial operation. The remaining technical challenges concern the corrosion of structural materials by high-temperature molten salts, the management of tritium produced in the cycle, and the complexity of reprocessing liquid fuel. In terms of regulation and international governance, the non-proliferation regime imposes rigorous safeguards, as the uranium-233 produced in the thorium cycle, although different from plutonium, presents risk profiles in certain configurations that require adequate safeguards. Advanced nuclear power is therefore not an immediate solution, but a long-term strategic investment which, if supported by adequate research resources and robust international regulatory frameworks, could contribute significantly to decentralising global energy power.

 

7. Geopolitical Instability and Energy Resilience: The Conflict with Iran

The conflict with Iran is currently one of the main factors of instability in the global energy system, bringing long-underestimated structural fragilities into sharp relief. Its tangible effects on oil and gas flows have dramatically amplified the intrinsic vulnerability of the current global energy landscape, whilst offering empirical proof of the geopolitical centrality of energy routes.

The critical chokepoint is the Strait of Hormuz, one of the main strategic corridors for global energy transit. Around 20% of global oil production and an equivalent share of international trade in liquefied natural gas (LNG) pass through this maritime passage. Disruptions to shipping traffic in this area have already generated tensions in commodity markets, inflationary pressures and risks of economic instability on a global scale.

This situation highlights an inescapable structural reality: the global energy system is highly concentrated and, as such, inherently fragile. A significant proportion of the world’s energy depends on a small number of geographical corridors and a limited group of producer countries. When one of these hubs enters a crisis, the impact spreads rapidly on an international scale, affecting prices, inflation, supply chains and economic stability.

Europe finds itself in a particularly vulnerable position. Despite the efforts at energy diversification undertaken in the wake of the crises of recent years, the European system remains heavily dependent on imports, both direct and indirect. The conflict with Iran has already produced visible effects: rising gas prices, volatility in the oil market and the risk of new systemic energy crises.

In this context, the conflict with Iran makes the transition from a centralised and geopolitically exposed energy system to a distributed and resilient one even more urgent. This transition entails the widespread development of renewable energy, integration with storage systems and smart grids, and the gradual reduction of dependence on critical supply routes. Advanced nuclear power — and in particular the thorium technologies analysed in the previous section — fits into this framework as a long-term strategic complement: not an immediate solution, but a building block of an energy system that is structurally more resilient and less vulnerable to geopolitical instability.

 

8. Conclusions

Energy geopolitics is currently undergoing a phase of profound and accelerated transformation. The model of the petro-states — founded on fossil fuel rents — remains influential, but is under increasing pressure: not only due to the climate crisis, but also because of the opportunities created by new technologies and new development paradigms.

Electric states are emerging as key players in an alternative model of power, in which the ability to generate, store and manage clean electricity becomes a central element of national competitiveness and economic security. The ongoing transition is not only redefining energy hierarchies but is rewriting the very foundations of power projection in the international arena. As the conflict with Iran has vividly demonstrated, a system based on fossil fuels is by definition concentrated and vulnerable; a system based on distributed energy — renewables, storage, advanced nuclear — offers structurally greater resilience and strategic autonomy.

Ultimately, the stakes go far beyond the climate issue: they concern who will hold power in the global economy over the next half-century. In this sense, the energy transition is not an ideological choice, but a strategic necessity imposed by contemporary geopolitical realities. Investing in electro-states, energy leapfrogging and distributed systems does not merely mean tackling the climate crisis: it means building a more stable, fairer and structurally more resilient global energy order.

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