The Daily Planet #40: The Petrostate, Part 1

We explored the Electrostate in some depth last week, which is a take on the Petrostate, an earlier merger of energy with politics. According to Wikipedia:

A petrostate, oil state or petrocracy is a polity whose economy is heavily dependent on the extraction and export of oil or natural gas. Petrostates are conventionally independent nations; however writers like Samuel Weston and Andrew Nikiforuk describes major oil-producing subnational entities like Wyoming,[1] Alberta and Louisiana as also petrostates.

As today's Daily Planet says:

Petrostates are a unique phenomenon, riddled with economic and political distortions created by the modern world's hunger for oil and gas.

Petrostates - countries heavily dependent on oil and gas revenues like Saudi Arabia, Russia, and Kuwait - play a significant role in the global economy due to their vast wealth. However, this dependence creates serious economic and political challenges, including weak institutions, limited diversification, and vulnerability to volatile oil prices.

Unlike diversified oil producers such as Norway or the U.S., petrostates rely heavily on oil rents, which often distort their domestic markets and hinder broader economic development. The rise of new extraction technologies, such as fracking, has shifted global oil production away from traditional producers, leading to a global oil glut and sharply lower prices.

Countries like Venezuela face severe economic crises (yeah, but why - perhaps one of its northern neighbors has something to do with this?), while others, including Saudi Arabia and Russia, have had to cut spending and seek new financial strategies. Despite their wealth and influence in global markets, petrostates struggle with economic underdevelopment and political risks.

However, as we saw last week, we shouldn't only focus on producer Petrostates, but also consumer Petrostates, i.e., nations whose economies are predicated on consuming energy in the form of fossil fuel. This includes the use of petroleum derivatives for transport, heating etc. With the fracking revolution culminating in Trump 2, is the US a Petrostate?