On February 28, 2026 the United States (US) and Israel launched an illegal war on Iran which killed its leaders, including the country’s supreme leader, Ali Khamenei. The US-Israel missile attacks have also resulted in multiple civilian casualties, most notably of a bombing of an elementary school that killed more than 160 children. This act of aggression comes after the US carried out a military operation in Venezuela and kidnapped its president, Nicolas Maduro. Both countries account for 30% of the world’s oil reserves, and both have long stood against US imperialism. The successive attacks on sovereign, resource-rich nations reveal the underlying goals of the US  – slow down the decline of its economy through imperialist plunder and war.

Oil barrel prices have risen an average of 50% since the attack on Iran. Working peoples, especially those in the global South, are facing the worst consequences with the resulting increase in prices of other basic commodities. For developing countries, the situation only worsens when compounded by low wages, weak social welfare, and persistent wealth inequality.

Decades of neoliberal policies pushed by the International Monetary Fund and World Bank have eroded measures in developing nations meant to safeguard domestic economies from external shocks. The IMF and World Bank introduced rapid deregulation and the unrestricted flow of foreign capital that allowed large foreign companies to dominate in strategic industries including oil and gas production. This is the opposite of ensuring public regulation and strong state roles in such key economic sectors.

Rapid deregulation and liberalisation

Since the 1980s, the IMF and World Bank have actively pursued the removal of government fuel subsidies as part of its structural adjustment programs in developing countries. Prior to deregulation, countries usually implemented price stabilisation mechanisms such as oil subsidies to set maximum prices for oil products and to counter global price shocks. The IMF-WB claims that keeping energy prices low for consumers creates immense fiscal pressure on government budgets. The institution argues that while the objectives of energy subsidies are well-intentioned, 

“Fossil Fuel Subsidies (FFSs) engender excessive energy use, and perpetuate inefficient technologies and behaviour. In the longer term, this reduces private sector competitiveness, thus having an adverse effect on the overall growth prospects.”¹

For countries that had their own oil industries, this meant adopting privatisation and those that relied on imports were forced to set prices above import-parity costs.  In either case, with the opening up of domestic markets, fuel prices at the consumer level were left to the oligopolistic control of large foreign oil companies.

Philippines

In the Philippines, almost three decades of the Downstream Oil Industry Deregulation

Act of 1998 or more commonly referred to as the Oil Deregulation Law has only given way to uncontrollable oil prices. With the removal of subsidies and regulation, oil companies are able to set retail prices free from government intervention. The deregulation of the country’s oil industry was one of the structural conditionalities for a USD 1.3 billion loan programme under the Ramos administration. The law’s passage was part of an 1998-1999 IMF economic policy package which centered around austerity, privatisation and strengthening the corporate sector, as well as other structural reforms. The Oil Deregulation Law sealed the privatisation of the previously state-owned oil company Petron. 

Coupled with the World Bank’s focus on value added taxes (VAT), and the implementation of WB-encouraged tax reform programs such as the TRAIN Law (raised excise taxes on petroleum) and CREATE Act (lower corporate income tax) the Oil Deregulation Law has placed the burden of rising prices on consumers while ensuring the continuous profits of oil companies.

The top three oil companies operating in the Philippines are Petron, Shell, and Chevron. They hold 45% of the market share.

Chile

From the 1920s until the early 1970s, Chile’s oil industry was controlled by the government. The Empresa Nacional del Petróleo (ENAP) was established in 1950 and became responsible for the exploration, refining, production, and distribution of oil and petroleum products.

Aggressive liberalisation, deregulation, and privatisation began in the 1970s under the military dictatorship of Augusto Pinochet, who rose to power following a coup that killed then-president Salvador Allende. The Pinochet government rapidly overturned many of the socialist-oriented policies enacted by the previous administration and introduced neoliberal policies including reforms in the energy sector. Oil prices were adjusted to narrow the gap between domestic and international prices, value-added taxes were applied, and the distribution of oil products was given to private domestic and international companies. While the ownership of the ENAP remained with the government, opening the market allowed private corporations to compete in the sector, from exploration to distribution.

The IMF-WB extended support to the dictatorship in Chile, as it often does when dictators rule in line with so-called free-market policies. The IMF approved loans provided that the government would enforce austerity measures and also maintain strict monetary policies. By the 1980s the government was in deep foreign debt and the Chilean economy was in crisis. Banks and financial institutions were bailed out by the government while the majority of citizens lived in poverty.

Nigeria

Nigeria is the fifth leading crude oil-exporting country in the world. Despite this, the country has struggled to produce refined petroleum and has historically depended on imports to meet large demands. Fuel subsidies in Nigeria began in the 1970s to counteract volatile international oil prices and keep domestic prices low especially for more vulnerable households.

The IMF and World Bank have long been advocating for the removal of energy subsidies in Nigeria to reduce fiscal pressure and to divert investments elsewhere. After multiple attempts to do so in the last five decades, the government arbitrarily announced the complete removal of fuel subsidies in January 2023. The aftermath of the policy saw a sharp increase in inflation that has disproportionately affected low-income households and worsened economic inequality. Aside from fuel prices, food and transportation costs have also increased.

The removal of oil subsidies have always been met with opposition from the Nigerian people who view the subsidies to be their right as citizens of an oil-producing country. The people argue that subsidies are not the problem but elite interests and corruption in government.

IMF-World Bank policies violate the people’s right to self-determination

The IMF-WB also cites the ecological impacts of fossil fuels as an added and even more valid reason to remove fuel subsidies. While fossil fuels are widely recognised as the primary drivers of climate change, fuel subsidy reforms conveniently leave out the fact that the largest contributors to the climate crisis come from the global North, and that the wealthiest individuals and corporations consume the most energy. The blanket policy leaves little room for developing nations to decide how to use their energy resources, and how to advance ecological shifts that uphold  people’s rights. The IMF push for the removal of energy subsidies restricts  countries’ right to freely determine their own development paths.

In a recent admission of error, a 2026 World Bank report stated that the push for deregulation and liberalisation was an “advice that has not aged well”. As a response to the multiple crises hounding the global economy, the IMF-WB says that it is now embracing industrial policy measures as a possible path to development. The admission rings hollow after decades of neoliberalism brought maldevelopment to the global South. A smokescreen when much damage already has been done and at a juncture where Southern countries are forced into forging sovereign development paths while responding to the climate crisis.

Oil, gas, and other sources of energy are basic necessities that must be easily accessed by and remain affordable for the people. This means the state should ensure that domestic prices are well-regulated despite movements in international prices. With the IMF and World Bank’s neoliberal history, essential goods and services have become unaffordable and inaccessible to the poor majority in developing countries especially in times of crises. IMF-WB loan conditionalities have forced people in developing countries to contend with the consequences of high debt repayments, austerity measures, and structural adjustment.

The extraction, production, and distribution of energy are not only matters of economic significance. Political systems and class dynamics determine who gets to decide how energy and other resources are utilised. By this standard are the social implications also measured. The IMF and the World Bank have always stood for corporate interests at the cost of people’s welfare. The influence and control of monopolies throughout the whole chain of oil production and distribution runs parallel to the neoliberal agenda of the IMF-WB to deregulate, liberalise, and privatise critical industries to maximise resource extraction and monopoly capitalist profits. #