• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 4 days They pay YOU to TAKE Natural Gas
  • 3 hours How Far Have We Really Gotten With Alternative Energy
  • 7 hours What fool thought this was a good idea...
  • 3 days Why does this keep coming up? (The Renewable Energy Land Rush Could Threaten Food Security)
  • 9 days The United States produced more crude oil than any nation, at any time.
Memorial Day Travel Expected to Near Record High

Memorial Day Travel Expected to Near Record High

Around 43.8 million Americans are…

Can AI Derail the Energy Transition?

Can AI Derail the Energy Transition?

The utilization of artificial intelligence…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

$100 Oil Has Been A Blessing For Gulf Economies

  • Gulf oil economies suffered through the last oil price crash, issuing record levels of debt in 2020.
  • Now, with oil prices well above $100 and set to stay there for the foreseeable future, GCC economies are thriving and IPOs in the Middle East are setting records.
  • It seems that the oil-rich economies in the region have learned their lessons from the last two oil price crashes, working hard to diversify their economies.

Just two years ago, the Gulf oil economies were issuing record debt to cope with the massive oil market downturn caused by the pandemic lockdowns. Now, the region is thriving with oil above $100 per barrel and is likely to remain there for the observable future.

Bloomberg reported this week that initial public offerings in the Middle East had enjoyed their best first-half ever this year, with total proceeds at $11.4 billion over the first five months of 2022. Petrochemical company Borouge, which is listed on the Abu Dhabi exchange, raised $2 billion.

It appears that while it may not be trendy in Western Europe or North America, the oil and gas industry is still quite attractive in the biggest producing region in the world.

“IPOs have held up very well in the GCC due to high interest from international and regional investors in recent offerings and in the upcoming [equity capital markets] pipeline,” Rudi Saadi, head of MENA equity capital markets at Citi, told Bloomberg.

“We’ve seen continuous net foreign inflows across all GCC exchanges, even during the recent selloff, a sign that foreign investors are buying this market despite the global volatility,” Saadi added.

Meanwhile, in Europe and North America, inflation fears remain substantial, energy prices remain higher than any government would like them to be, and stock markets are not doing so well.

In the Gulf, Dubai’s biggest utility - Dubai Electricity and Water Authority - raised $6.1 billion when it went public earlier this year, becoming the largest company on the Dubai exchange. The IPO was well oversubscribed, too, with investors placing orders worth $86 billion in total. Related: Citi: Oil Is Overvalued By $50 Per Barrel

The World Bank has estimated that the Gulf economies could expand by 5.2 percent this year, in large part thanks to higher oil prices. The war in Ukraine is also helping to boost the Gulf economies’ GDPs.

“As major hydrocarbon exporters, GCC countries may also benefit from changes in the energy markets brought about by the war in Ukraine,” the World Bank said in a recent report. “These countries may see strong fiscal and external surpluses, which could help spur consumer confidence and investments.”

The WB’s regional director for GCC noted that despite these positive developments for the Gulf economies, they need to commit to net zero and start reorienting their economies towards a less hydrocarbon-dependent model. According to him, if they fail to do so, they stand to lose oil revenues over the coming decades.

It seems, however, that the oil kingdoms are already diversifying. According to a report by Strategy & Middle East, a consultancy, the Gulf economies are expanding in the digital economy space and, with the right policies in place, they could see their combined GDP grow by $255 billion by 2030, with Saudi Arabia alone contributing $19 billion, Arab News reported this week.

“As the regional economy transitions to being led by digital disruptors, the digital economy could increase its contribution to regional GDP potentially by $30 billion over the next five years, from $169 billion to $204 billion,” Tarek El Zein, partner at Strategy & Middle East told Arab News.


The last two oil market downturns seem to have taught the Gulf states an important lesson in diversification. However, they also seem determined to do as much as they with their oil and gas reserves while there is still quite strong demand for them. And the demand is there, although OPEC just cut its oil demand estimate for this year by 200,000 bpd to 3.4 million bpd. Because even if demand weakens, supply will remain tight, and will likely keep prices above $100 for quite a while.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News