> What kind of leverage does this give countries to penalize others

In the case of China, it's pushed them to make headway in the process of building a manufacturing infrastructure that is more insulated from global energy price swings. IIRC they can also power much of it more cheaply (e.g. solar has no fuel cost), which provides them with a cost advantage.

As we have repeatedly seen, there is also leverage to be had in not having one's country internally levered to global oil prices.

So it provides leverage, but not to directly penalize.