Global Energy Transition and Its Impacts on Arab Oil-Exporting Economies

DOI

10.2991/978-94-6239-743-9_2How to use a DOI?

Keywords

Arab Oil Economies; Global Emissions Scenarios; Energy Transition; Climate Change; Oil Dependence

Abstract

The discovery of hydrocarbons in the Gulf Cooperation Council (GCC countries are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE)) (GCC) countries, Iraq, Libya, and Algeria, hitherto Arab Oil and Exporters (AOEs), largely contributed to their economic development and improved their people’s well-being. However, excessive reliance on hydrocarbons is believed to have slowed their structural transformation from natural resource-based to industrial, diversified economies. As the world economy gradually shifts toward clean energy, AOEs are deemed to face the long-term risk that hydrocarbons will lose their dominance in the global energy mix and that the vast resources they generate will be greatly reduced.

This paper sought to investigate this difficult issue, given the significant uncertainty surrounding the future of fossil fuels, by addressing two major questions. First, what are the implications of the global shift in the energy mix for AOE countries, and second, what strategies do these countries need to implement to continue developing at least at their past pace? To investigate both questions, we used the International Energy Agency’s (IEA, 2021) Net Zero Emissions (NZE) scenario as a benchmark to evaluate the impact of global energy shifts on these countries. We developed a counterfactual path in which AOE will grow until 2050, based on IMF projections through 2030. Based on some assumptions, we projected major economic aggregates for 2050. In the event of NZE, countries would need to find alternatives to hydrocarbon production and exports. Under the full NZE scenario, AOE will need to replace around $800 billion in real terms of oil and natural gas exports in 2050. To achieve this target, AOE countries would require manufacturing output to grow at the rate of 8% until 2050, double the historical growth rate (4%). This additional output would require an additional $5.3 trillion in new investments between 2025 and 2050 for the AOE economies to face the economic repercussions of the NZE scenario.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Belkacem Laabas
PY  - 2026
DA  - 2026/08/11
TI  - Global Energy Transition and Its Impacts on Arab Oil-Exporting Economies
BT  - Proceedings of API Conference 2025: Empowering the future: Energy Transition and Economic Diversification in Arab Countries
PB  - Atlantis Press
SP  - 3
EP  - 23
SN  - 3005-155X
UR  - https://doi.org/10.2991/978-94-6239-743-9_2
DO  - 10.2991/978-94-6239-743-9_2
ID  - Laabas2026
ER  -