The Arabs play with the Persian Gulf oil market

According to Energy Press, in order to reduce regional and global conflicts, it is necessary to identify and address the factors that guide the evolution and development of the Persian Gulf oil strategy. This article analyzes the scenarios of the International Energy Agency and its expected impact on the Persian Gulf oil producers and focuses on the three Persian Gulf oil producing countries that are members of OPEC, namely Saudi Arabia, UAE and Kuwait.
The main oil implications of the IEA scenarios are used as additional features in the current Persian Gulf oil strategy model. The expected drivers (or incentives) of the major Persian Gulf oil producers also stem from the IEA scenarios, however, there will be more active measures to increase their market share to cover the reduced share of Russia. The Persian Gulf will continue to increase upstream and downstream investments in the oil sector by accelerating the monetization of oil assets. In addition to production and refining, investments target the integration of clean technologies (such as carbon capture, use and storage, and hydrogen production) with upstream and downstream oil facilities to reduce the sector’s carbon footprint and increase product competitiveness in international markets.

Separation of oil revenues from the economy

Since the separation of oil revenues from the economy in the long-term future will not be realized under this scenario, Persian Gulf oil producers will continue to cooperate with OPEC+ members to maintain favorable price levels. In addition, the Persian Gulf countries will insist on building relations with China to create opportunities for economic diversification. The grand strategy under this scenario can be described as “protecting economic interests”. As mentioned, this article focuses on the three oil producing countries of the Persian Gulf that are members of OPEC, namely Saudi Arabia, UAE and Kuwait, although each of these three countries has its own energy strategy, they all have common ground that includes the monetization of oil assets for It is to support the domestic economy and protect their national interests.

This joint strategy was indirectly expressed at the Jeddah Summit for Security and Development in Saudi Arabia, which was held with American counterparts, including President Joe Biden, on July 15 and 16, 2022. In this meeting, Saudi Crown Prince Mohammed bin Salman stated that there are common concerns of hydrocarbon producers in the Persian Gulf regarding the gradual removal of oil from the energy system and their interest in earning money from their oil assets.

In general, the Persian Gulf countries are apparently striving towards the following goals: 1) Adopting a balanced approach, through a gradual and responsible transition towards more sustainable energy sources and reducing greenhouse gas emissions that result from the escalation of inflation, unemployment, and social and security problems while maintaining It prevents energy. 2) integrating clean energy technologies with industrial hydrocarbon systems, 3) investing in fossil fuels while encouraging the development of clean energy technologies over the next two decades. These goals reveal the consequences of the policy that can affect the internal and external affairs of the oil producing countries of the Persian Gulf. The policy problem that the Persian Gulf countries have not yet been able to solve is how to boost the production of goods and services that are not directly or indirectly dependent on the hydrocarbon sector.