The Gulf has spent decades selling oil and gas to the world. Now its governments want to sell something else: low-carbon hydrogen. It is an appealing prospect. The region has plenty of sunshine, deep pockets and companies that know how to build energy projects at scale. But the Iran–US war has brought an uncomfortable question to the surface. What good is producing a cleaner fuel at a competitive price if ships cannot move safely, investors hesitate and customers worry about delivery? The conflict has not made the Gulf’s hydrogen plans irrelevant. It has shown how much those plans still depend on the security of the energy system they are supposed to help transform.

A promising business, with strings attached

The GCC has genuine advantages. Solar power is becoming cheaper, and sunlight is abundant across much of the Arabian Peninsula. That creates opportunities for green hydrogen, made by using renewable electricity to split water. The region also has large natural gas reserves, which could support blue hydrogen if producers capture a substantial share of the emissions and keep methane leakage under control. Neither route is automatically cheap or clean. Electrolyzers, desalination, storage and transport cost money, while carbon capture has to perform as promised. Still, few regions can pursue both routes on this scale.

The Gulf can also draw on experience that newer energy exporters lack. Its ports, industrial zones, engineering firms and state energy companies already serve global markets. Ammonia, a potential carrier for hydrogen exports, is familiar to parts of the regional chemicals industry.

Sovereign wealth funds can help shoulder the expense of projects that take years to pay off. This does not mean an LNG terminal can simply be turned into a hydrogen terminal. New equipment and safety systems are needed. But the region is not starting from scratch.

Sovereign wealth funds can help shoulder the expense of projects that take years to pay off. This does not mean an LNG terminal can simply be turned into a hydrogen terminal. New equipment and safety systems are needed. But the region is not starting from scratch.

There is a larger economic motive behind the excitement. Gulf governments want to preserve a place in international energy trade while........

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