The Middle East has historically been one of the main engines of global gas production growth. Five countries, representing 85% of the region’s gas output, are expected to add more than 20 bcm of production between 2023 and 2025, marking a 3.3% increase over the two-year period.
Iran’s gas production growth is estimated at less than 2% in 2024 and just over 1% in 2025, driven by a series of gas capture projects aimed at reducing flaring and incremental production increases at South Pars Phase 11.
Qatar saw a 2% production decline in 2024 due to shrinking domestic consumption amid the country’s rapid solar PV rollout. Given the lower domestic demand and strong export prospects, Qatar is undertaking the Barzan Gas Diversion Project to direct feedgas flows to the country’s LNG export facilities from the Barzan processing plant, which started operation in 2020 and was initially dedicated solely to the domestic market. Gas production in 2025 is expected to remain broadly flat as Qatar’s next major expansion project at North Field East is not expected to start up before 2026.
Saudi Arabia’s gas production increased by an estimated 2% in 2024, thanks largely to the full-year impact of production from the Hawiyah Gas Plant expansion project and the first phase of the South Ghawar unconventional development, both of which came online in late 2023. Gas production is projected to grow by 4% in 2025, driven by the planned start-up of the Jafurah Phase 1 (2 bcm/yr) and Tanajib (27 bcm/yr) projects over the course of the year.
Oman increased its natural gas output by more than 4% in 2024, and it is projected to register further growth of 3% in 2025 as production from Block 10 continues to ramp up and the ongoing debottlenecking of the domestic gas grid enables higher production from existing fields
In the Middle East the role of natural gas in the power sector has been increasing in the past decade and oil-to-gas switching continued in 2024, driven by Iran, Iraq, Kuwait and Saudi Arabia. In road transport the rapid scale-up of LNG trucks in China – with record sales in 2024 – is contributing to China’s lower diesel demand. The use of LNG as a bunkering fuel is also expected to increase amid increasingly stringent emissions regulations. Based on the current order book, the number of LNG-fuelled ships is expected to almost double and reach over 1 200 vessels by 2028 (excluding LNG carriers). The displacement of oil and oil products in the power sector and long- haul transport is expected to continue over the medium term.
Saudi Arabia is the largest user of oil for power generation, burning an estimated 1.1 million barrels per day of liquids in its power plants. The country’s Liquid Displacement Program aims to replace oil with a 50:50 mix of gas and renewables in the electricity mix. Aramco upgraded its 2030 gas production target to a 60% increase from 2021 levels, driven by the Jafurah Basin gas project. Additionally, Saudi Arabia launched phase 3 of its gas transmission grid expansion and had over 8 GW of new CCGT capacity under construction and another 28 GW under development in 2024.
Iraq has made slow but steady progress towards reducing gas flaring since the early 2010s, but in mid-2024 it still captured only 65% of its gross natural gas output while flaring away 12 bcm annually. In early 2024 Iraq committed to reducing crude burning for power generation from May to December 2024 to meet OPEC+ obligations and the government-owned South Gas Company announced an accelerated gas utilisation plan to maximise gas capture volumes and reduce power sector oil use by 2028.
Kuwait faces a power crunch, in a country where nearly 45% of electricity is generated using oil. The government plans to add 12 GW of new capacity (9 GW of which gas-fired) by 2028. However, as of Q3 2024 only about 1 GW of new CCGT capacity had been approved.
Iran banned the use of mazut, a polluting type of heavy fuel oil, in three large power plants with a combined capacity of 4.5 GW in November 2024 to improve air quality. The ban was followed by electricity shortages and rolling blackouts almost immediately, which casts doubt on the phase-out of mazut from all 14 power plants using the fuel in Iran in the foreseeable future.