The European Union (EU) is entering a new phase of its energy transition. After decades of growth, its fossil-fuel imports have peaked and are now declining (Fig. 1). This represents a milestone for the EU, but also a potential looming shock for key supplier countries such as Algeria, Libya, Nigeria and Azerbaijan, where oil and gas revenues play an important part in sustaining public services and political stability.

Fig. 1: The net oil and gas imports of the European Union (EU) have peaked.
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a, Net oil imports. b, Net gas imports. Data are taken from ref. 2. STEPS is the Stated Energy Policies Scenario of the International Energy Agency (IEA); APS is the IEA’s Announced Pledges Scenario.

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Yet the EU is reducing demand without a clear plan for supply. Aside from a push to end reliance on Russian energy, there is no clear strategy for how to phase out fossil-fuel imports, which suppliers to favour or leave, or how to manage the geopolitical consequences of these choices.

This vacuum carries real risks Over the past three years, while Europe grappled with an energy crisis, oil and gas producers reaped record windfalls. However, energy shocks are often followed by countershocks, and one is already probably taking shape. The International Energy Agency (IEA) projects a glut of liquefied natural gas in the second half of this decade and a potential surplus of more than six million barrels of oil per day by 2030 (ref. 1). These shifts could deepen fiscal stress across fossil-fuel exporters, which runs the risk of fuelling instability on Europe’s borders.

Europe’s fossil-fuel exit is therefore no longer just a climate story. It is an economic and foreign policy challenge. This Comment outlines four pathways through which the EU could potentially structure its retreat as a major fossil-fuel importer. These include a market-based model that prioritizes cost efficiency, a security-first model focused on supply reliability, a climate-first model emphasizing emissions reduction and a fairness-based model centred on stability and justice. On balance, only a fairness-based fossil-fuel exit aligns Europe’s climate ambitions with its need to support geopolitical stability.

Producers at risk

Under the IEA’s Announced Pledges Scenario, EU gas imports are set to fall by nearly 150 billion cubic metres by 2030 (more than the annual gas output of Algeria) and oil imports by over 2 million barrels per day (almost half of Iraq’s oil exports)2. For countries heavily reliant on fuel export revenues, these are not abstract figures. They represent national budgets, civil service payrolls and food import bills. As demand for fossil fuels falls, fossil-fuel-producing countries may face revenue losses, rising debt and, potentially, growing civil unrest3,4,5. To illustrate their potential exposure, countries are mapped here according to two factors: the share of their fossil-fuel revenue that is dependent on EU demand and their expected population growth (Fig. 2). Population size matters because fast-growing populations divide shrinking revenues among more citizens, accelerating the decline in per-capita fossil-fuel income. Six countries stand out as particularly exposed: Algeria, Libya, Angola, Azerbaijan, Equatorial Guinea and Iraq. Most rely on national oil companies that fund more than half of public spending, while their populations are expected to grow by 30% or more by mid-century.

Fig. 2: Projected decline in per capita fossil-fuel revenue by 2050 if the European Union were to cease fossil-fuel imports.
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Calculations draw from Eurostat, OPEC and EIA trade data to determine export shares, World Bank data to assess revenue dependence, and UN World Population Prospects data for projected population change. Revenue loss is calculated as the difference between 2023 fossil-fuel export earnings and projected 2050 values after the European Union (EU)’s phase-out. Estimates assume no redirection of exports to other markets and should therefore be read as upper-bound exposure. They do not capture other determinants of vulnerability, such as fiscal resilience, governance capacity or diversification potential. Springer Nature is neutral about jurisdictional claims in maps.

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Exposure, however, does not equal vulnerability. Outcomes will depend on fiscal buffers, governance quality and the ability to pivot to alternative buyers6,7. Countries with stronger governance and more diversified economies are better placed to adapt; those with weak institutions and narrow fiscal bases may struggle. Some exporters may redirect exports to Asia, but looming global oversupply of liquefied natural gas and oil may intensify competition and depress rents, leaving little room for a painless pivot.

Strategic options to manage Europe’s fossil-fuel exit

The risks above highlight the importance of the UAE Consensus, the COP28 pledge to transition away from fossil fuels in a “just, orderly and equitable manner”8. As the world’s second-largest fossil-fuel importer and a self-proclaimed climate leader, the EU is uniquely placed to lead by example. Managing its reliance on vulnerable suppliers is central not just to Europe’s own stability but to demonstrating how this global commitment can work in practice. The EU has several options to shape this phase-down. Depending on the import criteria it prioritizes — cost, emissions, security or fairness — it is likely to favour different sets of suppliers (Table 1).

Table 1 How European Union fossil-fuel exit strategies shape its supplier mix
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For much of the past two decades, the EU has followed a market-based approach, letting prices and demand trends dictate supply. This model has prioritized cost efficiency and flexibility, but also left the EU dependent on a narrow set of exporters. In today’s volatile geopolitical environment, relying on a lowest-cost logic that increases dependence on a limited number of suppliers — whether in the USA, in the Gulf or Russia — is no longer a good security bet9.

A purely market-based phase-down also assumes that imports can be scaled back evenly from all suppliers. In reality, pipelines and liquefied natural gas terminals are built for sustained high volumes, not for gradual decline. As throughput falls, fixed costs are spread over fewer users, which will make some pipelines uneconomic before others. This will force Europe to decide which links to retire first, with each infrastructure choice reshuffling the costs and risks among exporters. Such dynamics emphasize why Europe’s exit must be actively managed, not left to the markets alone.

After Russia’s invasion of Ukraine in 2022, the EU shifted to a security-based model. The focus moved to diversification: reducing dependence on Russian gas by expanding liquefied natural gas infrastructure and stepping up engagement with other suppliers, including the USA, Qatar and Mozambique. This reduced immediate vulnerability but locked in long-term fossil assets and relationships, potentially delaying the energy transition.

More recently, an emissions-based approach has emerged, with the adoption of the EU Methane Regulation in 2024. This regulation sets methane-intensity standards for fossil fuels supplied to the EU market, including imports, reflecting the growing emphasis on pre-combustion emissions such as leakage and flaring. Implementation is gradual, but by 2030 importers must comply or face penalties and possible market exclusion. Although this could help to drive down global emissions, it also risks disadvantaging exporters — particularly in the Global South — with less capacity to cut upstream emissions.

None of these approaches, however, address the fiscal and geopolitical pressures facing fossil-fuel exporters — pressures intensified by volatile prices, declining revenues and the erosion of long-term demand certainty10. These dynamics threaten economic and political stability in producer economies. Managing such risks requires a fourth strategy, one focused on fairness.

A just transition requires an active foreign policy

A fairness-based approach recognizes that fossil-fuel suppliers are not only market actors but political economies whose fiscal stability depends on export revenues11. It would rely on structured bilateral agreements with key supplier countries in North Africa, the Middle East and Central Asia, coupling a gradual, predictable reduction in fossil-fuel trade with targeted support for renewable energy, carbon sequestration and low-carbon industrial development. The goal is to manage the geopolitical consequences of the EU’s fossil-fuel phase-down, by cushioning fiscal shocks and creating viable new economic pathways for exporter states. Given the wide diversity among fossil-fuel-producing countries, a country-specific approach is warranted12.

Many of the elements for such an approach already exist. The EU has concluded more than 30 energy and climate partnerships since 2021, including the Africa–EU Green Energy Initiative and the Comprehensive Partnership, both of which set broad cooperation frameworks. Infrastructure projects such as the ELMED power cable linking Tunisia and Italy and the Southern Hydrogen Corridor aim to connect new clean energy sources to European markets. EU-based development banks also finance transition projects across the region through programmes like the Global Gateway.

However, these activities remain fragmented and largely focused on Europe’s own clean energy demand, not on managing the fiscal and geopolitical consequences of its fossil-fuel exit. What is missing is a dialogue about the ramping down of fossil-fuel trade itself. The EU does not publish forward projections of its fossil-fuel import needs nor does it communicate how it intends to phase down supply, leaving exporters uncertain about future market prospects and risking overinvestment in upstream assets that may soon be stranded13.

A fairness-based approach could thus position the EU as a leader in supply-side climate governance14, helping to keep fossil fuels in the ground in line with the trajectories outlined in recent mitigation modelling15. Structured agreements could provide predictability for exporters while aligning Europe’s exit with regional stability and distributive justice, ensuring that the costs of Europe’s transition are not borne disproportionately by poorer, fossil-fuel-dependent neighbours.

The way ahead

The EU’s fossil-fuel exit is accelerating, driven by its climate targets, including a 55% emissions cut by 2030 and a proposed 85–90% cut by 2040. Yet without active management, this shift risks triggering fiscal and political instability in fossil-fuel-exporting countries. The four strategies outlined here are not mutually exclusive, but only a fairness-based approach addresses both the geopolitical and distributive dimensions of this shift.

Any such approach also has limits. Short-term rent-seeking continues to lock many producer economies into extraction, and the EU itself is not a unitary actor: member states still strike bilateral fossil-fuel deals that often pull in different directions. Although a fairness-based approach cannot resolve these constraints overnight, it can cushion fiscal shocks, create incentives for diversification and provide external support that makes reform more feasible over time.

The EU accounts for only 6% of global emissions, yet still represents around 20% of global fossil-fuel imports. The emerging buyers’ market for oil and liquefied natural gas gives the bloc untapped leverage to advance the global energy transition while managing its geopolitical risks. An upstream fossil-fuel supply strategy grounded in fairness would be even more effective if other major importers such as China, India, Japan and South Korea were to adopt similar approaches, or even coordinate through a buyers’ alliance.

Although the idea of developing roadmaps for a just transition away from fossil fuels did not make it into the final text of COP30, it did receive the backing of a large number of countries, and it will be discussed at a dedicated conference in April 2026 in Colombia, outside the formal COP process. This is the ideal moment for the EU to turn its shrinking fossil-fuel footprint into genuine geopolitical leverage — by steering towards, rather than stumbling into, the just and orderly global transition it has long called for.