The Gulf Cooperation Council (GCC) countries-Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman, and Bahrain-remain indispensable players in global energy markets. Together, they account for about 34 percent of the world’s oil exports and 26 percent of gas exports, making them cornerstones of the international fossil fuel supply chain. Their energy clout is underpinned by vast reserves of hydrocarbons, with Saudi Arabia and the UAE ranking among the world’s top producers of both oil and natural gas. Yet, beneath this dominance lies a mounting tension: while the region depends heavily on hydrocarbon exports to fund its economies, domestic demand for electricity is surging, compelling these nations to rethink how they generate, consume, and export energy.

At the heart of this dilemma lies a balancing act. GCC governments are accelerating electrification and renewable energy adoption in a bid to curb their reliance on fossil fuels for domestic power generation, even as oil and gas exports remain their economic lifeline. The dual strategy reflects an urgent imperative: ensuring energy security and resilience, while simultaneously maintaining revenue streams and aligning with global decarbonization trends.

Electricity demand in the Gulf has been rising steadily for years, fueled by rapid population growth, rising incomes, urban expansion, and the climatic reality of extreme heat. By 2035, regional consumption is projected to increase by 50 percent. Much of this growth is being driven by the proliferation of air conditioning, water desalination, and the increasing presence of energy-intensive industries such as data centers.

This growth poses a paradox for GCC countries. Despite their vast reserves of hydrocarbons, every barrel of crude or cubic meter of gas used domestically represents lost export........

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