Middle East Energy Leaders Warn of Underinvestment in Oil, Bet on Digital Growth

Two conferences in the Middle East this month opened insights into energy and sustainability from a Middle Eastern perspective.

ADIPEC’s mega event in Abu Dhabi brought together hundreds of speakers in 10 different strategic areas and numerous technical sessions over four days.

Sustainability was discussed in the context of the need for investment to sustain growth in all forms of energy, especially oil and gas. AI was also highlighted, which has been praised for having already achieved notable gains in oil operations and planning efficiency.

A much smaller but equally vibrant event opened in Dubai, where the Dii Desert Energy Summit brought together some of the same OEMs and EPC companies but wearing very different glasses, to see a new energy future in the Middle East.

Together they shed light on what is known and what is not known about the world’s energy future.

Words and phrases

Dr. Sultan Al Jaber, Managing Director and CEO of Abu Dhabi National Oil Company (ADNOC), who also serves as the UAE’s Minister of Industry and Advanced Technology, outlined ADIPEC’s path in his opening remarks.

“Shut out the noise, follow the signal,” he said. “Near-term uncertainty is real, while longer-term demand remains strong.”

“Long-term forecasts show growth in demand for all forms of energy in all markets.

“Renewable energy sources will more than double by 2040, liquefied natural gas will grow by 50 percent, jet fuel will grow by more than 30 percent, and oil will remain above 100 million barrels per day after 2040,” he said.

Al Jaber pointed out that oil will be increasingly used in materials as well as in transportation. He pointed out that the demand for electricity will rise with the capacity of data centers increasing fourfold, the presence of 1.5 billion people in cities, and the addition of 2 billion air conditioners around the world by 2040. In aviation, the global airline fleet will double by the same year.

He highlighted another key theme, expressing his prevailing concern about venture capital, saying: “We need to free up idle capital tied to existing energy infrastructure assets.”

His speech was followed by statements by Doug Burgum, US Secretary of the Interior and Chairman of the National Energy Dominance Council.

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He said: “Today is the day to announce that there is no energy transition, there is only the addition of energy and that we need more energy.”

The term “energy addition” was thrown around repeatedly over the four days along with other terms including “energy abundance,” “energy realism,” and “energy pragmatism.” One phrase noticeably absent from Dr. Al Jaber’s speech, and from almost the entire event, was “climate change.”

This may not be surprising except for the fact that Al Jaber served as chair of the conclave of the United Nations Climate Change Conference (COP28) in Dubai two years ago, which was the first UN climate summit to explicitly acknowledge fossil fuels as a cause of climate change and call for a shift away from them.

However, the phrase was used by Bill Gates, who appeared pre-recorded on screen at one of the technology discussions, where he expressed optimism about innovation to enable decarbonisation. Reducing carbon emissions is essential to maximizing human well-being, he said, and called for leadership in the deployment of key technologies.

No oil glut

OPEC took advantage of this event to present the highlights of its 2025 Global Oil Outlook report, which combines certainty about long-term demand growth with great interest in investment. The report expects global energy demand to expand by 23% until 2050, partly from energy-intensive industries including artificial intelligence. It expects oil demand to reach 123 million barrels per day in 2050, requiring $18.2 trillion in oil-related investments during the period 2025-2050, most of which is upstream investments.

As for the short-term outlook, ADIPEC CEOs, industry representatives and high-level ministers saw little signs of increased supply in 2026. But they were more interested in looking to the long term and their consensus was that capital investment was lacking, especially in the oil sector.

“I don’t think there will be a glut,” said James Danley, US Deputy Secretary of Energy, as he shifted his focus to longer-term considerations.

“The policies that should be enacted are deregulation efforts to ensure that long-term price signals can be responded to and demand can be met as intelligently as possible,” he said.

Eni CEO Claudio Descalzi explained why he does not see signs of oversupply next year.

“In the past 12 years, we have invested half of what we need to invest to increase production,” he said. “We know that demand is increasing, supply is more or less there, and in 2026 there is an additional million barrels, it is average but we are not investing enough.”

He continued: “We have Guyana, we have Brazil, but there is no other large project that can start production.” “So we have increasing demand and not enough supply and enough investment.”

Tengku Mohamed Taufik, President and CEO of Petronas Group, expressed similar concerns about long-term investment.

“Last year there was a figure of over $3 trillion (of investment), almost two-thirds of which went into renewables and carbon reduction,” he said. “There has not been enough of a return to fossil fuels and basic hydrocarbons.”

Musabih Al Kaabi, CEO of ADNOC’s Exploration and Production Sector, expressed confidence that global economic growth next year will be sufficient to stimulate more demand for oil. He also expressed concerns about investment.

“It is clear that the industry by its very nature suffers from a lack of investment, and the risk that we will face, most likely, is a lack of investments to mitigate the natural decline but also to meet the growing demand,” he said.

“I think this puts the onus on integrated energy producers like us because we need to maintain an acceptable level of investment.”

Gas expansion

Natural gas has received a recast of its own, no longer being described as a “transition” fuel but rather as a “destination” fuel, said Lorenzo Simonelli, chairman and CEO of Baker Hughes, who spoke at the conference.

Its enhanced position clearly comes at the expense of coal, which is the only fossil fuel that did not receive much attention at the Abu Dhabi International Petroleum Conference (ADIPEC).

The global gas market was looked at from different perspectives over the four days, with general agreement that although large quantities of cryogenic fuel are arriving on the market, growing demand will ensure there is no excess global supply.

M. Mohamed Hamel, Secretary-General of the Gas Exporting Countries Forum, discussed market dynamics.

“Of course, there is a wave of new energy capabilities expected in the next five years,” he said. “This is a challenge and an opportunity.”

He explained that the wave will lead to downward pressure on prices, but the opportunity exists because it will also stimulate additional demand from price-sensitive markets, especially in Asia, where gas can penetrate new markets in the transportation and maritime sectors.

He said global demand was increasing steadily, with an increase of 1.6 percent expected this year and 1.8 percent next year.

Yumiko Yao, president of Tokyo LNG carrier Tokyo Gas, spoke on behalf of a major gas importer. It described a fundamental shift in market structure.

“Europe has improved its energy facilities and stocks have stabilized,” she said. “They are now dealing with increased contracts that provide destination flexibility.”

She added: “For us, we believe that Europe and Asia are now competing for LNG but they also complement each other.

“I think we look at the market together and communicate better, so we try to work for mutual benefit, which is challenging, but good for market liquidity.”

Mr. Sandeep Kumar Gupta, Chairman and Managing Director, GAIL, shared his insights from the perspective of importers in developing countries.

He added, “Geopolitical tensions led to higher prices.” “India is a very price-sensitive market, despite the huge potential to increase its natural gas consumption due to urbanisation, and due to its young demographics.”

He continued: “I am very confident that when geopolitical tensions are resolved, and prices return to normal levels, there will be tremendous potential for natural gas growth.”

“All the growth will come in the LNG market, where India’s current share is about 5-6% of the world’s total LNG trade, and I believe this share will double.”

Dr. Philip Mashalbela, Managing Director and CEO of Nigeria LNG, spoke as a representative of an emerging exporter.

“Since ’22, we have looked at buyers interested in long-term contracts to give them the reliability of supply they are looking for,” he said.

“We are a growing company with a production capacity of 22 million tons per year, and we are in the process of building a seventh train that will take us to 30 million tons per year, so we plan to bring additional supplies to the market.”

Data centers in the Middle East and North Africa region

As ADIPEC was concluding the DID Desert Energy Summit, which opened in Dubai, with the participation of more than 70 speakers, including high-level executives, investors and industry representatives, all of whom were dedicated to developing net-zero energy in the Middle East and North Africa (MENA) region.

The research and networking organization Dii, which has been active in the MENA region since 2009 when renewable energy was barely taking off, seeks to build regional capacity for new energy. Now it has a lot of momentum to build on.

The International Energy Agency expects global solar, wind and hydropower capacity to double by 2030. Investment in low-carbon energy now outpaces investment in fossil fuels by 2 to 1, up from roughly 1 to 1 a decade ago, and this gap is likely to widen. Meanwhile, the Ember Energy Research Center reported that solar and wind energy development has already outpaced electricity demand growth in the first half of 2025, causing a slight decline in demand for coal and gas.

These global gains drive the Industrial Innovation Initiative to create catalysts for innovation in the MENA region. One of the outcomes announced at the summit is the report, Data centers: the new purveyors of clean energywhich is examining the Middle East as a prime location for “sustainable” data centers.

The report highlights a huge opportunity for the Gulf region, as countries are now aggressively developing digital infrastructure with major US companies building cloud data centers while pursuing net-zero corporate goals.

The basic proposal is to export data center capacity, using the world’s lowest-cost renewable energy, abundant land in the region, and a favorable political environment that can move quickly. The report focuses on building “hubs” where data center developers can leverage these advantages.

It describes places where this work is already happening, where critical infrastructures for gigascale renewables generation and high-bandwidth connectivity intersect. These projects include NEOM City in Saudi Arabia, the Salalah Free Zone in Oman, and the UAE-US Artificial Intelligence Campus in Abu Dhabi, in addition to sites in Kuwait, Qatar and Jordan.

Relevant technologies are described in some detail; The report sets out a phased decarbonisation strategy for data center operations based on renewable energy and low-carbon hydrogen.

The emergence of renewable energy-powered data centers in the MENA region may offer hope, but it must be taken seriously, given the surprising progress in new energy over the past two decades. What seems certain is uncertainty about the future of old and new energy, an uncertainty lurking in the background of both the recent conferences in Dubai and Abu Dhabi.

Written by Alan Mamoser for Oilprice.com

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