Michael Bolliger Giovanni Staunovo

A cleaner, more sustainable, and secure energy supply base is essential to winning the battle against climate change and should also help to foster more stable economic growth. However, the transition from non-renewable to renewable energy sources will happen gradually, with absolute demand for crude oil and natural gas still to rise throughout this decade. In addition to reaching net-zero objectives, policymakers will likely pay attention to energy affordability and supply security. In this context, we believe Middle East suppliers are well positioned to become a partner of choices for energy importers in Europe, Asia, and elsewhere. At the same time, we expect the region to increase the share of renewable energy production and consumption. Given its natural advantages, the Middle East can become a leading exporter of renewable energy as well, which should ease fiscal strains, boost economic diversification, create jobs, and above all, help to slow climate change.

We expect global GDP and population growth to remain the two most important drivers of global energy demand in the foreseeable future. While demand growth took a hit during the pandemic, the global population and economic activity are expected to keep expanding in the next decades, fueling the need for more energy. Ongoing urbanization trends in developing countries will also be key, as urbanization typically raises living standards and boosts energy consumption. Global energy needs could grow by another 30–50% over the next 30 years, we estimate. In other words, the world’s thirst for more energy is unlikely to be satisfied anytime soon.

Our thirst for energy keeps rising

Values in exajoules

Source: Energy Institute Statistical Review of World Energy 2023, UBS

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