Demand for oil and gas expected to fall

Demand for oil and gas expected to fall

By Nasser Almatrouk (Hughes Hall College University of Cambridge)

For a lengthy period, the enduring viability of oil earnings in GCC economies has been a major worry, leading to several initiatives to diversify their economies through policies, plans, and reforms. As the globe shifts to renewable energy and aspires to achieve net zero carbon emissions by 2040, demand for oil and gas is expected to fall. Oil revenues account for more than 70% of GCC countries’ total revenues. Despite this, the transition from surplus to deficit in fiscal balances indicates that the GCC region is still experiencing turbulence.

Amidst elevated oil prices, several GCC economies struggle to meet fiscal break-even levels, highlighting the urgent need for alternative revenue sources. Continuing energy price volatility impedes economic diversification efforts. The long-term viability of hydrocarbon revenues in economies of the GCC is in jeopardy. Despite the continuing significance of oil, it is crucial to diversify revenue sources. Adopting proactive measures, such as investing in renewable energy, fostering innovation, and establishing new industries, is vital for ensuring the resilience and prosperity of GCC economies in the face of altering global dynamics.

Deep diving into Kuwait’s unique case of lack of progress toward its plans to diversify its sources