Brunei

Brunei exists because it once ruled Borneo—and because Shell found oil in what remained. When Magellan's expedition arrived in 1521, the Sultanate of Brunei controlled virtually all of Borneo, the Sulu Archipelago, and coastal Philippines. Sultan Bolkiah presided over one of Southeast Asia's dominant maritime powers. By 1888, the sultanate had shrunk to a British protectorate, having ceded Sarawak to the adventurer James Brooke and lost Sabah to the British North Borneo Company.

Then came oil. Shell's 1928 discovery transformed the remnant sultanate from a minor protectorate into a petro-state. When Brunei gained independence in 1984, it was among the world's wealthiest countries per capita. Sultan Hassanal Bolkiah, who has ruled since 1967, serves simultaneously as Prime Minister, Finance Minister, Defense Minister, and Foreign Affairs Minister. His personal fortune approaches $30 billion; the Brunei Investment Agency manages $73 billion in sovereign wealth.

This concentration creates stability and constraint. Oil and gas still generate 88% of fiscal revenue. Diversification efforts under Wawasan 2035 have shown results: the non-oil-and-gas sector now accounts for 53.6% of GDP (up from 20% in 2003), and non-hydrocarbon exports reached 70% of total exports by 2024. In early 2025, Brunei launched its first offshore licensing round in over a decade. GDP grew 4.2% in 2024—the fastest pace since 1999.

But the sultanate has also turned inward. Sharia Penal Code provisions implemented in 2014 and 2019 mandate punishments including stoning, though a moratorium exists. A dual judicial system—secular and religious—operates in parallel. The political opposition is nonexistent; the sultan rules by decree.

By 2026, the question is whether a 14th-century sultanate structure can steward a 21st-century energy transition—or whether absolute stability becomes absolute rigidity when oil demand eventually declines.