Middle East

Energy system of Middle East

The Middle East is central to the functioning of global energy markets. The region is home to five of the world’s top 10 oil producers – Saudi Arabia, Iraq, the United Arab Emirates, Iran and Kuwait – and three of the top 20 gas producers. It accounted for more than four in ten barrels of global oil exports in 2022.

Countries across the Middle East face significant energy and climate challenges. Domestic oil and gas demand could increase substantially, driven by economic expansion and population growth. Demand for cooling and desalinated water may also rise significantly as extreme weather events tied to climate change, such as heatwaves and droughts, are likely to become more frequent. Nearly 95% of the electricity generated in the Middle East comes from natural gas and oil – the highest share in the world, though countries in the region also have some of the world’s best solar resources.

As clean energy transitions reduce demand for fossil fuels globally, producer economies in the region will need to unlock new sources of revenue. As a result, a number of producers are developing plans to build out low-carbon energy industries – leveraging their energy expertise to diversify their economies and energy mixes at the same time.