The power transition in the Middle East was not going to be linear. The conflict involving Iran has made that clear, after President Trump has shifted the balance of power. In its first phase, the destruction of fuel depots, industrial sites and urban infrastructure released more than five million tonnes of CO₂ over a period of weeks, according to a Guardian analysis. That’s not background noise. It’s a big enough increase to make up for years of incremental progress in system components.
The Middle East’s official energy transition is underway, but it is now appearing alongside episodes of carbon emissions and supply disruptions. Essentially, it pulls the carbon out of the edges while absorbing the sharp shock of the carbon. The result is a change in the system that, at times, is literally on fire.
Look past the immediate distractions and the direction of the plot remains clear. The Middle East is not giving up hydrocarbons. It also measures how they are used.
Oil and gas still dominate energy consumption at around 20% and 64% respectively (as of the end of 2025). In terms of production, the concentration is strong, with gas producing about 71% of electricity and 23% of oil. That’s the beginning.
So continuous change is straightforward. Oil-fired power is being phased out because it emits too much smoke and is not economically efficient. GlobalData expects oil’s share to fall to around 10% by 2035, while its manufacturing share falls to around 11%. Gas remains central, accounting for about 65% of generation as its capacity declines modestly to 50%.
This is not a departure from thermal energy. It is a reshaping of it. Gas is the only fossil fuel that is expected to grow completely over the next decade.
The build pipeline reinforces that point. Between 2026 and 2030, around 86GW of thermal power is expected to come online, compared to just 10.8GW of withdrawals. In many states, that would indicate a reversal. In the Middle East, it shows the growth in demand and the premium placed on reliability.
Saudi Arabia shows the concept. It plans to retire about 5.9GW of oil-fired power by 2030, replacing it with gas and renewables while freeing up waste for export. Energy sector reform here is as much about improving exports as it is about carbon emissions.
Renewables are growing rapidly, but the starting point is important. Last year, they accounted for only 6% of the generation in the region, compared to the global average of close to one in three.
That gap explains why the Middle East can generate large volumes of solar power while adding thermal power. It does not replace a mature renewable system. It continues while meeting the growing demand.
By 2035, renewables are expected to account for approximately 21% of generation and 38% of energy. Solar PV does most of the work, rising to about 33% of installed capacity and contributing about 18% of production.
The ways of the world vary greatly. Saudi Arabia is expected to raise renewables from about 6% to 38% of generation by 2035. Kuwait is forecast to see solar production increase from 93GWh in 2025 to around 21TWh in 2035. Yemen, by contrast, is expected to remain flat at around 704GWh, with the conflict of cons continuing.
Solar economy is no longer the main barrier. Integration is a thing.
Panels in the region work under extreme conditions, high temperatures and dust that affect the cycle of output and storage. These factors shape the real-world performance and economics of the project in addition to the efficiency benefits in the articles.
At the system level, intervals are a defining problem. Solar is concentrated during daylight hours, creating an imbalance between supply and demand that must be managed elsewhere in the system.
This brings storage infrastructure and the grid into sharp focus.
Energy storage is growing, but from a low base. Power is concentrated in a few markets, particularly Saudi Arabia, the UAE and Israel.
Saudi Arabia alone is targeting around 48GWh of storage capacity by 2030, with around 7GW of capacity estimated across all active and planned projects. On paper, that suggests momentum. In fact, a significant share remains in the announced or planned phase, where the risk of delivery is the highest.
The natural environment adds complexity. Battery systems must operate at temperatures that can exceed 50°C, increasing performance and safety challenges. Therefore, engineers are prioritizing strong chemicals and investing in cooling systems, increasing both costs and technical requirements.
The grids face the same pressure. Expanding transmission capacity and managing change requires continuous investment. Without this layer of infrastructure, renewable capacity cannot convert into a reliable supply.
Gas remains the backbone of the energy system, supported by the region’s largest reserves estimated at 695,000bcf, with Iran accounting for around 270,000bcf.
In 2025, Iran produced about 333TWh of gas electricity, the highest in the region. However, sanctions and geopolitical constraints continue to limit investment and export potential.
More broadly, the gas trade is changing. Imports are down from 2021, and exports are down in 2025 amid disruptions. Incidents such as the temporary closure of offshore platforms have highlighted the weakness of supply.
What it means is to measure gradually. Domestic energy security gains weight along with export revenue, especially in times of instability.
The Iran conflict is not just a national backdrop. It directly affects the output region profile.
Large fires in fuel storage facilities and industrial areas have released significant amounts of CO₂ and other pollutants in short periods of time. This episodic attack sits alongside long-term efforts to decarbonise, creating a mismatch between policy approaches and real-world outcomes.
They also strengthen the importance of hydrocarbons in world markets. Supply disruptions drive up prices, which strengthens the economic case for continued manufacturing and exports as domestic systems change.
Emerging sectors such as sustainable jet fuel, carbon capture and hydrogen are also benefiting. The region has nearly ten active carbon capture, utilization and storage (CCUS) projects totaling approximately 4.8mtpa, with capacity forecast to approach 30mtpa by 2030.
Hydrogen is growing relatively fast, with capacity expected to grow at around 48% per year by 2030 across a total of 84 projects. However, much of this growth is concentrated in a small number of major developments, raising questions about delivery risk.
The target is big. Abu Dhabi National Oil Company (ADNOC) aims to capture 10mtpa of CO₂ by 2030, Aramco to 14mtpa by 2035, and Saudi Arabia to 44mtpa. Yet enabling frameworks such as carbon pricing, permits and incentives remain underdeveloped.
As in other areas, ambition is easier said than done.
The overall picture is one of tension rather than conflict. The Middle East is pursuing a rational restructuring of its energy system, reducing reliance on fossil fuels, increasing gas and scaling up renewables.
At the same time, the conflict introduces volatility that affects both emissions markets and energy markets. Sudden carbon emissions, infrastructure damage and supply disruptions sit alongside long-term investment strategies.
So the power transition in the Middle East is real, but uneven. It goes on, but not in a straight line. The key question is whether the supporting systems, physical, regulatory and political, can develop fast enough to keep them on track.
This article was adapted and reported by GlobalData. All data, forecasts and project metrics are taken from that GlobalData release unless otherwise indicated.
To access the full report, visit the GlobalData Power Intelligence Center: www.globaldata.com/industries/power .
“Middle East energy: A revolution under fire” was originally created and published by Energy Monitor, a product owned by GlobalData.
The information on this site is provided for general information purposes only. It is not intended to be advice on which you should rely, and we make no representation, warranty or guarantee, either express or implied as to its accuracy or completeness. You should obtain professional or expert advice before taking, or refraining from, any action on the basis of the content on our site.
