Competitiveness Vulnerabilities: Petroleum Dependency and Infrastructure Exposure Across Development Levels

As nations pursue economic growth amid accelerating climate transitions and geopolitical uncertainty, a new dimension of competitiveness is emerging: the hidden vulnerability of critical infrastructure to petroleum supply shocks. Infrastructure systems—such as transportation, utilities, and communications—form the backbone of national productivity, yet their structural dependence on petroleum is becoming a strategic liability in today's volatile global environment. Despite expanding investment in clean energy, petroleum still accounts for 33% of global energy consumption (IEA, 2023) and remains embedded in the daily functioning of infrastructure. Recent disruptions— including the COVID-19 pandemic and the Russia-Ukraine conflict—have shown how petroleum price volatility, which exceeded 40% in 2022, can cascade through infrastructure networks, impairing logistics, public services, and trade. Guan et al. (2020) illustrate how such disruptions ripple across global supply chains, amplifying initial shocks and undermining broader economic performance. These cascading effects reflect a shift in global risk dynamics: petroleum-linked infrastructure fragility is now a systemic economic risk, not just a sectoral concern. Yet traditional competitiveness metrics largely ignore these embedded energy vulnerabilities, focusing instead on direct costs, labor, or technology gaps.