Petro Diplomacy 2025: The GCC Energy Sector: Transformation, Diversification, and Global Ambition

For the 11th consecutive year, AGSI will convene its Petro Diplomacy conference, bringing together private and public sector stakeholders from the United States, Europe, and the Gulf Arab countries to discuss emerging trends in energy markets and regional politics. 

The Gulf Cooperation Council states are undergoing a major energy transformation, balancing economic diversification, energy security, and sustainability. All this is taking place at a time of growing geopolitical tensions in the Middle East and upheaval in the international order following the election of Donald J. Trump for a second term as president of the United States. 

The war in Gaza and attacks on Red Sea shipping by Houthi rebels in Yemen tested regional alliances and redirected energy trade routes, though oil prices were largely unaffected as flows from the Middle East were not disrupted. But oil prices have weakened as the war in Gaza continues. A further decline would erode the spending power of the oil exporting Gulf Arab countries and weaken their ability to withstand political and economic shocks.  

The GCC countries are intensifying efforts to reduce dependence on oil revenue, expand renewable energy capacity, and position themselves as global leaders in conventional and clean energy development. Despite the diversification push, oil and gas remain core economic pillars for GCC countries, so the transition needs to be managed carefully to maintain stability and prepare for a more sustainable future when demand for oil peaks.  

GCC countries aim to be global leaders in hydrogen production, leveraging abundant natural gas and renewable energy to secure new sources of revenue in the coming decades. The state-owned national oil companies are also expanding their international presence with investments in Asian, European, and U.S. energy markets thereby becoming more integrated in the global energy network.  

Balancing economic diversification with oil reliance remains a challenge. Climate policies and global energy transitions may impact long-term fossil fuel demand, while scaling up renewable and hydrogen projects requires massive infrastructure investment and regulatory frameworks. 

While fossil fuels continue to dominate, the shift to renewables, hydrogen, and energy efficiency is reshaping the region’s energy landscape. The success of these efforts will depend on clear policies and goals, innovation, international collaboration, and technological advancement.

This is an in person event. A live stream link will be provided in the coming days. 

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The views represented herein are the author's or speaker's own and do not necessarily reflect the views of AGSI, its staff, or its board of directors.