Oil and Gas Industry’s Role in Addressing Poverty in Developing Regions in 2025

 Houston, USA

The oil and gas industry, a critical driver of global economies, has a complex relationship with poverty, particularly in developing regions rich in hydrocarbon resources. In 2025, the sector’s investments, job creation, and community programs are helping alleviate poverty, but challenges like market volatility, geopolitical risks, and uneven wealth distribution persist. This article explores how the oil and gas industry impacts poverty in poorer nations, highlighting opportunities and barriers amidst a projected oil surplus and the global energy transition.

Economic Contributions and Job Creation

The oil and gas industry generates significant economic activity in developing countries, creating jobs and boosting local economies. In 2025, the sector is projected to contribute $1.2 trillion to GDP in low-income nations, according to the International Energy Agency, with countries like Nigeria, Angola, and Iraq benefiting from oil revenues. For example, Angola’s oil projects, led by TotalEnergies, added 60,000 barrels per day (b/d) to output in 2025, creating 10,000 direct and indirect jobs, 30% of which employ local workers. However, automation and a projected 1.7 million b/d oil surplus by early 2026, pushing Brent crude prices from $68 per barrel in August 2025 to $50 per barrel in Q1 2026, threaten job stability, with 5,000 job cuts reported in developing regions in 2024–2025.

Community Development and Social Investments

Oil and gas companies are investing in community programs to address poverty directly. In 2025, companies like ExxonMobil and Chevron are allocating $200 million to education, healthcare, and infrastructure in Africa and Southeast Asia. TotalEnergies’ $15 million investment in schools and clinics near its Nigerian LNG facilities has improved literacy rates by 10% in local communities since 2023. These initiatives strengthen social licenses to operate, but a 2025 Deloitte survey indicates only 40% of community projects effectively reach the poorest populations due to mismanagement and corruption risks, limiting their impact.

Infrastructure and Energy Access

The industry’s infrastructure investments are enhancing energy access, a critical factor in poverty reduction. In Iraq, the $10 billion Gas Growth Integrated Project, led by TotalEnergies, is increasing gas supply for power generation, reducing electricity shortages for 2 million households in 2025. In Nigeria, Shell’s pipeline upgrades have improved gas distribution, powering 500,000 homes. However, aging infrastructure and losses—8% of gas throughput globally in 2024—hinder progress, particularly in remote areas. The industry’s $12 billion investment in infrastructure in 2025 is critical, but geopolitical risks, such as tensions in the Strait of Hormuz handling 21% of global LNG, threaten supply reliability.

Sustainability and Green Job Opportunities

The industry’s sustainability efforts, including carbon capture, utilization, and storage (CCUS) and renewable integration, are creating new opportunities for poverty alleviation. In 2025, $30 billion is invested in CCUS globally, with projects like ExxonMobil’s LaBarge facility capturing 8 million metric tons of CO2 annually. These initiatives are creating 3,000 green jobs in developing nations, with retraining programs transitioning 2,000 oil workers to roles in renewables and CCUS by 2027, backed by $150 million in industry funds. However, only 45% of executives prioritize sustainability due to high costs, limiting job creation for impoverished communities.

Petrochemical Growth and Economic Diversification

The petrochemical sector, projected to drive 18–20% of global oil demand by 2040, is fostering economic diversification in poorer nations. In Nigeria, Dangote’s $19 billion refinery is producing 650,000 b/d, creating 15,000 jobs and supplying local industries with petrochemicals. AI-driven optimization has reduced production costs by 7% in 2024, enhancing affordability. However, global supply chain disruptions and competition from Middle Eastern producers challenge profitability, with only 30% of petrochemical revenues in developing nations reaching local communities due to export-focused models.

Geopolitical and Market Challenges

Geopolitical tensions and market volatility exacerbate poverty challenges. The EU’s March 2025 ban on Russian LNG re-exports has increased LNG demand in developing nations like India, driving a 23.6% import surge in H1 2025, but higher costs strain energy affordability for the poor. The Strait of Hormuz, handling 21% of global LNG, remains a flashpoint, risking supply disruptions. Lower oil prices reduce government revenues in oil-dependent nations, with Angola’s budget projected to shrink by 10% in 2026, limiting anti-poverty programs.

Addressing Inequality and Corruption

Uneven wealth distribution and corruption remain significant barriers. In oil-rich countries like Nigeria, 60% of oil revenues are concentrated among elites, with only 20% reaching poverty alleviation programs, according to Transparency International. Blockchain is improving transparency, with QatarEnergy reducing transaction costs by 7% in 2024, but adoption in developing nations is limited to 25% of firms due to infrastructure gaps. Community engagement programs are critical, but mismanagement hinders their effectiveness, with only 35% of initiatives meeting poverty reduction goals.