Learn about the latest trends that are influencing the Middle East oil and gas industry, such as demand, technology, renewables, gas, cooperation, and risks.

Traditionally, the Middle East has been associated with vast reserves of fossil fuels and large-scale production, which has historically resulted in significant carbon emissions. Some initiatives include investment in carbon capture and storage (CCS) technology, which is essential for reducing CO2 emissions from the extraction and burning of fossil fuels. Saudi Arabia's Vision 2030, the United Arab Emirates’ Energy Strategy 2050, and Qatar's Sustainability Strategy are examples of strategic plans aimed at economic diversification and investment in renewable energy. There is much potential in the region for low-carbon energy innovation due to abundant solar resources, which can be harnessed for both domestic use and export.

Last updated on Mar 1, 2024

What are the latest trends in the Middle East oil and gas industry?

The Middle East is home to some of the world's largest oil and gas reserves, but the industry is facing significant challenges and opportunities in the wake of the COVID-19 pandemic, the energy transition, and geopolitical tensions. In this article, we will explore some of the latest trends that are shaping the Middle East oil and gas industry in 2021 and beyond.

1 Demand recovery

The global demand for oil and gas plummeted in 2020 due to the lockdowns, travel restrictions, and economic slowdown caused by the coronavirus outbreak. However, as the vaccination campaigns progress and the markets reopen, the demand is expected to rebound gradually, especially in Asia, which is the main destination for Middle Eastern exports. According to the International Energy Agency (IEA), the global oil demand will increase by 5.4 million barrels per day (mb/d) in 2021 and by another 3.1 mb/d in 2022, reaching 99.5 mb/d by the end of next year. The Middle East producers, led by Saudi Arabia and the United Arab Emirates (UAE), have been coordinating with the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to balance the supply and demand and support the oil prices.

Add your perspective

2 Digital transformation

The Middle East oil and gas industry is also undergoing a digital transformation that aims to enhance efficiency, productivity, safety, and sustainability. The adoption of technologies such as artificial intelligence (AI), cloud computing, big data, internet of things (IoT), and blockchain is increasing across the value chain, from exploration and production to refining and marketing. For example, Saudi Aramco, the world's largest oil company, has launched a digital hub that leverages AI and advanced analytics to optimize its operations and reduce costs. Similarly, ADNOC, the UAE's national oil company, has implemented a smart field program that uses sensors, drones, and robots to monitor and manage its assets remotely.

Add your perspective

Bunmi Bashiru CSM, MSc

Agile Project Manager | Certified Scrum Master| 10+ Years in Oil & Gas, Renewable Energy, Manufacturing, and Maritime | Engineering Projects | Lean Methodologies | Team Leadership |Open to relocation
Report contribution
While the digital transformation in the Middle East oil and gas industry undeniably brings about significant advancements, it also raises considerations about cybersecurity. As these critical infrastructures increasingly rely on interconnected technologies, safeguarding against potential cyber threats becomes paramount. Efforts to enhance efficiency and productivity should be paralleled with robust cybersecurity measures to protect sensitive data and prevent disruptions that could have far-reaching consequences on both regional and global scales.

Like

Unhelpful

3 Renewable energy

Another key trend in the Middle East oil and gas industry is the growing interest in renewable energy sources, especially solar and wind power. The region has abundant natural resources and potential for renewable energy development, which can help diversify its economy, reduce its carbon footprint, and meet its climate commitments. Several countries have announced ambitious targets and plans to increase their renewable energy capacity and reduce their dependence on fossil fuels. For instance, Saudi Arabia aims to generate 50% of its electricity from renewable sources by 2030, while the UAE plans to achieve 44% of its energy mix from clean sources by 2050.

Add your perspective

Bunmi Bashiru CSM, MSc

Agile Project Manager | Certified Scrum Master| 10+ Years in Oil & Gas, Renewable Energy, Manufacturing, and Maritime | Engineering Projects | Lean Methodologies | Team Leadership |Open to relocation
Report contribution
While the demand for oil and gas is expected to rebound, its long-term growth trajectory faces increasing competition from renewable energy sources like solar, wind, and geothermal. This trend could be accentuated by government policies promoting clean energy investments and consumer interest in reducing carbon footprints.

Like

Unhelpful

4 Gas expansion

The Middle East oil and gas industry is also expanding its focus on natural gas, which is seen as a cleaner and more versatile fuel than oil. Natural gas can play a key role in meeting the growing demand for electricity and industrial use, as well as in supporting the integration of renewable energy sources. The region has vast reserves of conventional and unconventional gas, such as shale gas and sour gas, which require advanced technologies and investments to unlock. Some of the major gas projects in the region include the North Field expansion in Qatar, which will increase its liquefied natural gas (LNG) production by 43% by 2027, and the Tamar and Leviathan fields in Israel, which have transformed the country into a gas exporter.

Add your perspective

Bunmi Bashiru CSM, MSc

Agile Project Manager | Certified Scrum Master| 10+ Years in Oil & Gas, Renewable Energy, Manufacturing, and Maritime | Engineering Projects | Lean Methodologies | Team Leadership |Open to relocation
Report contribution
In addition to its environmental benefits, the emphasis on natural gas in the Middle East aligns with global efforts to transition towards a more diversified energy mix. This shift not only addresses environmental concerns but also contributes to energy security by reducing dependence on a single energy source. Furthermore, by strategically investing in advanced technologies for extracting unconventional gas reserves, the industry can position itself as a driver of innovation, fostering economic growth and ensuring long-term sustainability in the face of evolving energy dynamics.

Like

Unhelpful

5 Regional cooperation

The Middle East oil and gas industry is also witnessing a trend of increased regional cooperation and integration, driven by the common interests and challenges of the countries. The region has several cross-border pipelines and infrastructure projects that facilitate the trade and transit of oil and gas, as well as the exchange of expertise and technology. For example, the UAE and Saudi Arabia have established a joint committee to cooperate on energy, industry, and infrastructure sectors. Moreover, the recent normalization of relations between some Arab states and Israel has opened new opportunities for collaboration and dialogue on energy issues, such as the Eastern Mediterranean Gas Forum and the Abraham Accords.

Add your perspective

6 Geopolitical risks

The Middle East oil and gas industry, however, is not immune to the geopolitical risks and uncertainties that affect the region and the world. The industry faces various threats and challenges, such as the ongoing conflicts in Yemen, Syria, Iraq, and Libya, the tensions between Iran and the US and its allies, the instability in Lebanon and Iraq, and the potential spillovers of the COVID-19 crisis. These factors can disrupt the production, transportation, and security of oil and gas resources, as well as the investment climate and the market confidence. Therefore, the industry needs to adopt a proactive and resilient approach to manage and mitigate these risks and to ensure its long-term sustainability and competitiveness.

Add your perspective

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

Add your perspective

Shereen Dawoud

Managing Partner | Dawoud & Dawoud Law Firm | fully fledged law firm with primary focus on Banking and Investment, Energy, IT, Agency and Distribution, Dispute Avoidance, AI, IP, Fintech, Insurance tech & Climate tech
Report contribution
Traditionally, the Middle East has been associated with vast reserves of fossil fuels and large-scale production, which has historically resulted in significant carbon emissions. Some initiatives include investment in carbon capture and storage (CCS) technology, which is essential for reducing CO2 emissions from the extraction and burning of fossil fuels. Saudi Arabia's Vision 2030, the United Arab Emirates’ Energy Strategy 2050, and Qatar's Sustainability Strategy are examples of strategic plans aimed at economic diversification and investment in renewable energy. There is much potential in the region for low-carbon energy innovation due to abundant solar resources, which can be harnessed for both domestic use and export.

Like

Unhelpful

What are the latest trends in the Middle East oil and gas industry?

1

2

3

4

5

6

7

1 Demand recovery

2 Digital transformation

3 Renewable energy

4 Gas expansion

5 Regional cooperation

6 Geopolitical risks

7 Here’s what else to consider

Oil & Gas

Rate this article

Thanks for your feedback

More articles on Oil & Gas

More relevant reading