Energy

The first International Development Research Centre (IDRC)-Middle East Institute (MEI) Roundtable on Energy Transitions in the Middle East and North Africa (MENA), held on January 20, 2022, explored the challenges and opportunities facing the region as a result of the global energy transition. As it accelerates over the course of the century, this global transition will provide new opportunities for economies to evolve while putting a strain on the current economic model of many nations in MENA.

Expert regional analysis by MEI scholars and contributors.

The global LNG landscape is changing, and while Qatar will continue to be a major LNG exporter, it will briefly drop to third in the global rankings until planned expansion projects come on stream in the middle part of the decade. Strategically, Qatari suppliers may opt to change their market supply profile, which will have a knock-on effect on the global market, both LNG suppliers and buyers.

This policy brief provides a deep dive into the far-reaching and interrelated policies imposed by the government to reduce the country’s deficits, debts, and reliance on hydrocarbons.

Lama Kiyasseh and Lina Osman join Karen Young, director of MEI’s Economics and Energy program, to discuss how sustainable finance is changing the region by channeling financial resources toward addressing environmental and social challenges.

Academic and policy-based research demonstrates that women and youth in most MENA countries face legal, regulatory, and socio-cultural barriers to entering the formal labor market and generating income. Entrepreneurship can be a viable alternative for MENA women and youth because of its prestige in the region and its ability to catalyze inclusive growth. This brief draws on research and evidence to formulate policy advice on how support for entrepreneurship can enhance the economic security of women and youth in what will be a slow and painful post-pandemic recovery.

With the recent announcement of the Jafurah Field, a massive unconventional, non-associated gas play, Saudi Arabia is looking to enter the global gas sector. The field’s estimated reserves, while substantial, are insufficient to meet current domestic needs and, in the future, displace dirty heavy fuel oil used in power generation and satisfy international export goals. The kingdom thus faces difficult decisions regarding the allocation of the Jafurah gas — to either domestic or international markets — and both options have significant challenges.

The Arab Gulf states appear to be following a common template in responding to the global transition toward an energy system in which renewables play an increasingly central role. They are publicizing renewable energy targets, decarbonizing upstream and downstream oil and gas operations, commissioning renewable energy projects, and improving energy efficiency, among other strategies. A closer look, however, reveals differences in how they have deployed solar and wind power capacity.

Read MEI’s weekly briefing featuring expert analysis of key regional developments for the week ahead.

The Black Sea basin has become a flashpoint due to Russia’s interventions in Georgia and Ukraine. This has implications not only for European security, but also for Mediterranean security as well. There are three key areas where the MENA region will be affected by a large-scale confrontation between Russia and Ukraine: energy, agriculture, and refugees.

The U.S. request for Qatari assistance in ensuring the EU’s energy security in case of a Russian supply disruption should be perceived as a political gesture of support addressed to Western allies and a warning to Russia. In reality, however, the American request is just one factor in Qatar’s calculations as it considers increasing its energy exports to Europe, and Doha’s final decision will be determined by an intricate combination of long-term economic and political considerations. In this equation political reasons may not be dominant and economic drivers will not always be in the West’s favor.

​​​​​​​The Program on Economics and Energy asked our non-resident scholars and advisory council members for their outlook for 2022 on some pointed energy questions. Topics include oil prices, Iran’s production, OPEC+ output targets, and the adequacy of current SWF savings levels.

Gulf oil producers do not envisage a post-2050 world devoid of hydrocarbons, even though two of the region’s biggest producers, the UAE and Saudi Arabia, have committed to net-zero carbon emissions by 2050 and 2060, respectively. Reconciling their future environmental commitments with their current reliance on hydrocarbons is going to be an arduous and expensive journey that starts with decarbonizing their oil and gas production to reduce their carbon footprint and increasing their domestic green energy production. With demand for oil and gas forecast to continue post-2050 — albeit at lower levels than now — their net-zero target does not equate to zero oil and gas production. Instead, their transition will differ from that of other countries and will happen at a different pace.

Saudi Arabia has undergone tremendous social change in recent years, but it has struggled to make good on some of its more ambitious financial goals. Much of the promised foreign direct investment has yet to arrive, and the kingdom’s growth agenda has drained its foreign reserves. Most of Mohammed bin Salman’s more eye-catching promises, including futuristic urban megaprojects, remain unfinished.