The World Energy Outlook 2025 highlights the Middle East’s dual role as a global energy powerhouse and a rapidly growing consumer market. The region’s energy dynamics are shaped by abundant oil and gas resources, rising domestic consumption, and increasing focus on diversification through renewable energy and efficiency measures. Below are ten key takeaways from the IEA report on the Middle East’s energy outlook to 2035.
1. Middle East Remains a Core Global Energy Producer
The region is home to five of the world’s top ten oil producers – Saudi Arabia, Iran, Iraq, UAE, and Kuwait – and three leading natural gas producers – Iran, Qatar, and Saudi Arabia. Oil production has increased in 2025 as OPEC+ countries unwind earlier production cuts.
2. Oil and Gas Dominate the Energy Mix
Natural gas meets 56 percent of total energy demand and oil covers 41 percent, far above global averages of 23 percent and 30 percent. In Iran, over 70 percent of demand is met by gas, while in Qatar, gas supplies over 90 percent.
3. High Energy Demand Driven by Wealth, Industry, and Climate
Per capita energy use in the Middle East is more than double the emerging market average. Energy subsidies, petrochemical industries, rising car ownership, and intense cooling needs due to the hot climate contribute to high consumption.
4. Electricity Demand Rising Faster than Total Energy Use
Between 2010 and 2024, regional energy demand grew at 2.6 percent annually. Through 2035, growth slows to 1.8 percent under STEPS. Electricity demand, however, rises faster, driven by cooling, desalination, and electrification.
5. Cooling is the Main Driver of Electricity Growth
Cooling accounts for a quarter of total electricity demand and nearly half of summer peak loads. By 2035, space cooling demand grows by about 140 TWh under STEPS. Efficiency policies and better building design aim to moderate growth.
6. Desalination Adds to Power Demand Pressure
The Middle East hosts 80 percent of the world’s thermal desalination capacity. As water scarcity intensifies, electricity use for desalination is set to increase 2.5 times by 2035, with a shift toward efficient reverse osmosis systems.
7. Electric Vehicles Gaining Momentum
EVs are still at an early stage in the region but growing quickly. Jordan is leading adoption – in 2024, over 50 percent of new car sales were electric, signaling early momentum in transport electrification.
8. Investment Concentrated in Fossil Fuels but Slowly Diversifying
Energy investment equals about 6 percent of the region’s GDP – double the global average. Currently, 78 percent of spending is directed to fossil fuels, but this share is expected to fall to 66 percent by 2035 as renewables and grids attract new funding.
9. Solar PV to Become a Key Power Source
By 2035, solar PV will supply more than 15 percent of electricity generation in the Middle East under the STEPS scenario, supported by low costs and high solar potential. Another 5 percent will come from wind and other renewables.
10. Cooling Load Management Can Support Renewable Integration
Smart cooling and thermal storage technologies can shift electricity demand closer to midday, aligning with peak solar generation. This flexibility helps reduce grid stress and enables higher renewable penetration in the regional power system.
Conclusion
The World Energy Outlook 2025 shows that while the Middle East will continue to dominate global oil and gas supply, its energy future is increasingly shaped by diversification, efficiency, and climate adaptation. Rising electricity needs from cooling and desalination will challenge energy planners, but expanding solar capacity and smarter demand management offer promising solutions.
Baburajan Kizhakedath