The Outlook for Energy Demand Growth in the Middle East and North Africa: Regional Supply as a Critical Driver of Demand

The Middle East and North Africa region is set to experience substantial growth in demand for energy during the remaining years of the present decade. Factors driving this growth vary enormously by sub-region and individual country, but there are broad similarities in the forms of both primary and final energy demand growth that are expected to materialize by 2030. Additionally, as most regional energy consumption is minimally integrated with global markets due to the availability of local supply, there is often an insufficient amount of attention paid to the granular aspects of demand growth from the region itself, as oil and gas exports from this part of the world, particularly the Gulf Cooperation Council (GCC) region as well as Iraq, are major determinants of the global supply and demand balance.

Indeed, the GCC region has largely been able to guarantee energy security for its population via the development of local supply, although there have been some exceptions to this dynamic. For example, strong natural gas demand growth in Kuwait, driven heavily by the power sector, has led the country to become a major importer of liquefied natural gas (LNG).

Additionally, the abundance of local supply does not guarantee that local demand growth can be met. This challenge becomes evident when taking a closer look at the natural gas balances of countries like Egypt and Iran, where local supply is increasingly constrained due to demand growth that has been largely unmanaged on the policy side. This will be a key area to watch in the coming years; major forecasters expect the region’s electricity demand to grow by between 29% and 37% from 2020 to 2030.