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Since global oil specialties have become more selective with their investments and setting the priorities of shareholders ’returns, national oil companies in the Middle East (NOCS) still play a pivotal role in global energy security amid market dynamics and energy transfer. Take advantage of low tie costs, strong local bases, and strategic aspirations, they are in a good position to meet the increasing international demand for energy.
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With non -OPEC+ supply growth and the installation of investment obstacles on the source, these NOCS expand and expand the scope of international portfolios. Satisfied with more than 6.5 million barrels per day from the surplus of raw capacity (1H25) and 400 billion dollars from the project to 2020-2035, especially in invasive and external projects, the Middle East is about to maintain its energy leadership while leading economic diversification and low carbon growth.
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Market dynamics
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Since the Covid-19 pandemic, investment views have fluctuated in traditional oil and gas. While oil and gas companies initially accelerated to spend on renewable energy sources, many have since focused their investment again towards hydrocarbons. The current slowdown in the transition may be reflected in the coming years, which may prevent market dynamics and investment morale. It is expected that the number of crude operas will reach its peak about 2027 due to a fewer number of new projects and reduce the narrow oil activity, while global demand continues to rise. This is the growing gap for demand and demand in OPEC+ to increase production over the next decade.
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Amid this strict view, excess surplus surplus in the Middle East is vital to achieving a balance between supply and future demand, which reaffirms the permanent strategic importance in the region in global energy markets.
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Aditya Saraswat, First Vice President, MENA Research Director
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However, to realize their full ambitions, OPEC+ Core members in the Middle East must carefully navigate in excess markets and wait for the peak of offer other than Opec+. With non -OPEC+ investment, the Middle East countries accelerated to increase the supply, and benefit from the seasonal demand deficit and low cakes. Product exports grew from about 5.7 million barrels per day (BPD) in the first quarter of 2019 to 7.2 million barrels per hour in the first quarter of 2025, which now represents a quarter of the trade of global products. This double pressure of price dynamics and demand in the market may enable OPEC+ to the capacity sooner than expected.
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Continuous crude oil expansion projects in the United Arab Emirates, Saudi Arabia, Iraq and Kuwait focus on maintaining the increasing ability. For the Kingdom of Saudi Arabia and the United Arab Emirates, maritime developments in the abundant fields such as the Alawite and Lower Zakum, Berri, Marjan and Zuluf are decisive to its goals of 12 million barrels per day and 5 million barrels per day, respectively. Additional expansions can provide Upper Zakum, Safaniya and Canima an increase in capacity as both countries look forward to compensating for declines from their wild origins, which carry more than half of the general total of the general.
It is important to treat operational challenges, such as high water and water management, increasingly, especially in mature wild fields such as Ghawar, AdNOC’s Bab, Bu HASA and ASAB. For Iraq and Kuwait, the continued investment to expand production capabilities from the currently produced fields is very important to reach 6 million barrels per hour and 4 million barrels per hour. In the case of Iraq, support for infrastructure in the form of export stations, pipelines, refineries and water injection is very important.
International expansion
Given the ongoing discounts of OPEC+ production, which limits NOCS in the Middle East from harnessing their entire local production capabilities, these companies have been strategically focused towards aggressive international expansion to maintain growth. They are developing into leading international companies (INOCS) through ambitious global strategies.
ADNOC’s launch of XRG, an 80 billion dollar investment vehicle, represents this trend, as it targeted global leadership in chemicals, integrated gas, and low -carbon energies, with significant investments in Azerbaijan, Mozambique, Tormanstan and the United States. Saudi Aramco takes advantage of its share in Midocecaan Energy and expanding the biases in Peru Lng to become a world power of LNG, with interests in the United States and Australia. QATARENERIGY continues high capabilities exploration blocks in Namibia, Brazil and Surinam, and diversifying the base of its resources. Collectively, these moves emphasize their ambitions of energy security, diversification of governor and low -carbon world leadership.
Within the Middle East, investment trends indicate the axes towards invasive and external developments. Moreover, with most countries reaching their declared goals, Greenfield Drive is set to the peak soon, giving way to maintenance and brown field projects to maintain investment. The region has developed a pipeline from the announced expansion of more than $ 400 billion between 2020 and 2035, and about a third of it is targeted towards external developments, with a similar share directed towards developments in LNG and gas.
Natural gas power
Natural gas has become essential for the power generation mix in the region, which represents about 72 % of the current electricity production. The growth of the expected demand for energy demand, which is nourished by the increases in the population, industrial expansion, and high temperatures, will increase the gas generation by 12 % by 2030. While the share of renewable energy sources grows rapidly, and expects to reach 20 % by 2030, reliability and flexibility of gas -powered gases that are still necessary for the stability of the network and providing the base.
The Middle East continues to consolidate its position as a global force in the production of natural gas, is about to become the second largest gas producer in the world by 2025, outperforming North America only. Since 2020, gas production in the region increased by about 15 %, with expectations indicating a 30 % increase by 2030 and an increase of 34 % by 2035. The main developments throughout the Kingdom of Saudi Arabia, Iran, Qatar, Oman and the United Arab Emirates lead this boom. North Field LNG projects in Qatar have been assigned to almost twice the capacity of 77 million tons annually (MTPA) to 142 MTPA by the end of the contract, which enhances its location as a global liquefied natural gas supplier. The Kingdom of Saudi Arabia aims to increase production by more than 40 % by 2030, driven primarily with the unconventional gas field, which supports the country’s energy diversification plans.
The supply chain turned
The oil and gas supply chains in the Middle East pass a strategic transformation, driven by the long -term energy expanding plans in the region amid enlarged cost. NOCS, such as Aramco Saudi Arabia, ADNOC and Qatarenergy, leads localization initiatives to increase the flexibility of the supply chain and value within the country. The AdDive program aims to the total value of ARAMCO Saudi (IKTVA) to increase local purchases to 70 %, which enhances local manufacturing and technology transfer. The ADNOC Value Program (ICV) has given billions of contracts to regional suppliers, created thousands of local jobs and enhances light movement on the supply network. The Tawteen’s Tawteen initiative is enhanced by the same source resettlement and the development of partnership.
The settlement efforts of this region are the region to build a strong network of supply chain capable of withstand global turmoil and geopolitical doubts. Cooperation between international and local companies, adopting advanced technologies, and long -term contracting strategies enhances operational efficiency and flexibility. This approach also supports the greater industrial diversification ambitions in the region and energy transport. The aim of this transformation is to ensure that the region can support current huge projects and future expansions, and maintain competitiveness despite inflationary pressures.
Low carbon investments
At the same time, this NOCS has a great financial ability to enhance low -carbon investments, although this spending often represents a smaller share of free cash flow compared to traditional investments. The goals of national carbon removal and economic diversification aspires drive deals in technology, sustainability and alternative energy, and the region is placed as a low -cost -cost barrel with a varied mix of local energy that can meet the growing global fluids and demand for gas under the requirements of advanced sustainability.
In the area, we see different methods. The United Arab Emirates, Saudi Arabia and Oman are continuing with strong integrated strategies, expanding both clean energy generation and hydrocarbon. On the contrary, Kuwait, Qatar and others emphasize improving oil and gas assets for cost and emissions efficiency, with a focus on maximizing financial returns as sustainability efforts gradually progress.
The Middle East is more important to the global energy system, as it provides about a third of crude oil in the world and five natural gas. In addition, a quarter of global energy demand is met by the region, which confirms its decisive role amid the increasing geopolitical tensions that threaten commercial flows.
Political geography and security
This strategic importance increases through the complex political geopolitical scene in the region and the main maritime selection points, such as the Strait of Hermoz, the Suez Canal, and the Bab Al -Menbi Strait. These vital trading methods make regional stability necessary for global supply security. The Strait of Hormuz alone takes approximately 20 % of the world’s petroleum fluid and liquefied natural gas trade, and is still a hot point due to the Iranian strategic position and continuous regional tensions. While the complete closure is unlikely, intermittent disturbances can raise market fluctuations, which prompts the Gulf states such as the Kingdom of Saudi Arabia and the United Arab Emirates to invest in alternative pipelines to mitigate these risks and ensure energy flows without interruption.
At the same time, the conflict areas in Yemen and Syria continue to break the infrastructure of oil and biological gas, and to stop the reconstruction and the source investment. The long civil war in Yemen and the continuous hostility of the Houthi rebel groups have affected repeatedly on maritime trade through the Strait of the Gulf of Suez and Bab Al -Menbi, which led to the disruption of charging and the threat of energy supply flow. Likewise, the closure of the Iraqi Torke’s pipeline has strongly affected the exports of Kurdish crude, a decisive economic artery. These compound geopolitical and security challenges require the Middle East and North Africa states (MENA) carefully manage risk, protect basic commercial selection points, and follow up on diplomatic efforts to maintain stable energy supplies and market trust amid constant uncertainty.
Mobility in the transition
The Middle East stands as a vital leader of global energy security amid market dynamics and a continuous energy transition. Continuous investments by NOCS in the Middle East and North Africa in both traditional oil and gas and low -carbon -emerging technologies are necessary to balance the increasing demand for energy with the elasticity of supply.
The strategic surplus in the region, the various power portfolios, international expansion aspirations, and the commitment to adoption and localization of technology provides it by moving in financial, geographical and operational challenges effectively. Reaching strong capital and financial health supports these efforts, allowing the Al -Makh’a Agency for investment with confidence and maintaining economic diversification. With the continued geopolitical tensions on critical selection points, cooperative risk management will ensure that the Middle East and North Africa region remains a reliable, competitive and innovative energy resource for upcoming contracts.
By Aditya Sarasawat, First Vice President, Director of Research in the Middle East and North Africa in Risad Energy
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