Global upstream oil investment is forecast to decline this year.

Global upstream oil investment is set to fall this year for the first time since the Covid slump in 2020, with upstream oil and gas spending gravitating to the Middle East, according to the 2025 edition of the IEA’s annual World Energy Investment report

The forecast 6% drop, the steepest since 2016, is driven mainly by a sharp decline in spending on US tight oil, and reflects lower oil prices and demand expectations. Upstream natural gas spending is set to maintain the levels seen in 2024. Together, upstream oil and gas investment for 2025 is forecast at less than US$570bn, a decline of around 4%. Of this, 40% is dedicated to slowing down production declines at existing fields. Global refinery investment in 2025 is set to fall to its lowest level in the past 10 years.

In contrast, investment in new LNG facilities is on the rise, with new projects in the USA, Qatar, Canada and elsewhere set to come online. Between 2026 and 2028, the global LNG market is set to experience its largest ever capacity growth, with the USA set to nearly double its export capacity.

Global spending on upstream oil and gas is gravitating to the Middle East, the report finds, which is set to invest around US$130bn in oil and gas supply in 2025, around 15% of the global total. The region accounts for around 30% of global oil production and 17% of global natural gas production.

Saudi Arabia’s upstream oil and gas investment is the highest in the Middle East, and is set to reach US$40bn in 2025, nearly 15% higher than in 2015. In Qatar, domestic investment has ramped up sevenfold since 2015 with the accelerated development of the huge North Field, while foreign investment has quadrupled in the same period.

Global capital flows to the energy sector are is set to rise in 2025 to a record US$3.3 trillion, a 2% rise in real terms on 2024, despite headwinds from elevated geopolitical tensions and economic uncertainty, with clean energy technologies attracting twice as much capital as fossil fuels. Around US$2.2 trillion is forecast to be invested in renewables, nuclear, grids, storage, low-emissions fuels, efficiency and electrification, twice as much as the US$1.1 trillion going to oil, natural gas and coal.

This investment in clean technologies reflects not only efforts to reduce emissions but also the growing influence of industrial policy, energy security concerns and the cost competitiveness of electricity-based solutions, according to the report.

“Amid the geopolitical and economic uncertainties that are clouding the outlook for the energy world, we see energy security coming through as a key driver of the growth in global investment this year to a record US$3.3 trillion as countries and companies seek to insulate themselves from a wide range of risks,” said IEA Executive director Fatih Birol. “The fast-evolving economic and trade picture means that some investors are adopting a wait-and-see approach to new energy project approvals, but in most areas we have yet to see significant implications for existing projects.”

Also highlighted in the report is the dominance of China as the single largest investor in energy, with its share of global clean energy spending rising from a quarter to almost a third. “When the IEA published the first ever edition of its World Energy Investment report nearly ten years ago, it showed energy investment in China in 2015 just edging ahead of that of the United States,” Dr Birol added. “Today, China is by far the largest energy investor globally, spending twice as much on energy as the European Union – and almost as much as the EU and United States combined.”

The report also underlines the rise in electricity investments and the doubling of global spending on low-emissions power generation, led by solar PV, with investment in solar expected to reach US$450bn this year, making it the single largest global energy investment item. Battery storage investments are also climbing rapidly. Investment in grids, however, currently standing at US$400bn per year is failing to keep pace with spending on generation and electrification, with obstacles being lengthy permitting procedures and tight supply chains for transformers and cables.

Spending patterns remain very uneven globally – with many developing economies, especially in Africa, struggling to mobilise capital for energy infrastructure, the report finds. Today, Africa accounts for just 2% of global clean energy investment. Total energy investment across the continent has fallen by a third over the past decade due to declining fossil fuel spending and insufficient growth in clean energy. To close the financing gap in African countries and other emerging and developing economies, international public finance needs to be scaled up and used strategically to bring in larger volumes of private capital, according to the report.

Eight OPEC+ oil producers have confirmed they will hike production in July.

Eight OPEC+ oil producers have confirmed they will hike production in July, according to their previously agreed plan to unwind 2.2mn bpd in voluntary cuts from April 2025

The eight OPEC+ countries, which previously announced additional voluntary adjustments in April and November 2023, namely Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman, will hike production by 411,000 bpd in July from the June 2025 production level.

In a statement, OPEC comments that this action is taken in view of the “steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories,” and in accordance with the decision agreed upon on 5 December 2024 to start a gradual and flexible return of the 2.2 million barrels per day voluntary adjustments starting from 1 April 2025. It adds that the gradual increases may be paused or reversed subject to evolving market conditions, and that this flexibility will allow the group to continue to support oil market stability.

The eight OPEC+ countries also noted that this measure will provide an opportunity for the participating countries to accelerate their compensation. The eight countries reiterated their collective commitment to achieve full conformity with the Declaration of Cooperation, including the additional voluntary production adjustments that were agreed to be monitored by the JMMC during its 53rd meeting held on 3 April 2024.

They also confirmed their intention to fully compensate for any overproduced volume since January 2024. The eight OPEC+ countries will hold monthly meetings to review market conditions, conformity, and compensation.

The eight countries will meet on 6 July 2025 to decide on August production levels.

Despite the increase in supply, oil prices have held steady, with geopolitical tensions likely contributing, such as the Russia/Ukraine war, the release of the IAEA report on the Iran nuclear programme and potential supply disruptions in Libya and Canada.

Some analysts view the OPEC+ supply hike as reflecting Saudi Arabia’s attempt to regain market share, with its budget and spending plans under pressure.

Jadwa Investment, in its report on Saudi Arabia’s Q1 budget statement, notes that the Kingdom recorded a fiscal deficit of SR58.7bn in Q1-25, as revenue declined by 10% year-on-year due to lower oil revenue, while spending was 5% higher. Oil revenue declined year-on-year by 18% due to lower dividends from Saudi Aramco and lower oil prices.

“Oil revenue will remain under pressure in 2025 as oil prices have trended lower than in Q1 and output gains will only partly offset this,” it comments.

“The outlook for oil prices remains highly uncertain, and much will depend on the fortunes of the global economy during this period of volatile US policymaking. The evolution of OPEC+ policy is also uncertain and important.”

In its latest Oil Market Update, Jadwa remarks, “Global fundamentals may improve if US policymaking settles down, the US Fed finds room for more rate cuts, and China continues with stimulus. But, with oil inventories likely to build during 2025, further oil production growth and structurally slowing Chinese demand, the oil market may lack an upward catalyst.”

Under the deal, ADNOC Drilling will acquire eight land rigs in Kuwait and Oman. (Image source: ADNOC Drilling)

ADNOC Drilling has signed an agreement to acquire a 70% stake in SLB's land drilling rigs business in Kuwait and Oman, as it seeks to expand its regional footprint beyond the UAE

Under the deal, ADNOC Drilling will acquire eight fully operational land rigs under contract with the respective national oil companies (NOCs) of both countries, two in Kuwait and six in Oman. It will accelerate ADNOC Drilling’s expansion plans, providing it with a foothold into what it sees as two highly stable GCC markets with clear drilling plans driven by top-tier clients, in a move that will generate attractive returns.

Through this partnership, ADNOC Drilling will gain immediate access to earnings, cashflow and returns through the eight land rigs. This acquisition will enhance the company’s ability to deploy cutting-edge technologies, integrated drilling services, digital solutions and AI-driven efficiencies, according to the company – optimising performance, reducing environmental impact and driving value for customers across the region. The deal offers scope for ADNOC Drilling to acquire the remaining stake over time.

Abdulrahman Abdulla Al Seiari, ADNOC Drilling CEO, commented that the move is a “very exciting opportunity” for ADNOC Drilling, reinforcing its position as one of the leading companies in drilling and integrated services.

“Our partnership with SLB will provide ADNOC Drilling with a solid operational and financial platform to further expand in the region,” he said. “This business is well-established, profitable and operating with long-term contracts, making this a highly complementary and value-accretive addition to our portfolio. This move represents a calculated and cost-effective approach with a clear focus on financial discipline, value accretion and risk management.”

Jesus Lamas, president, Middle East and North Africa, SLB, added, “This partnership reflects the strong collaboration between SLB and ADNOC Drilling, and our shared commitment to driving value through collaboration across the region. We are confident that, working together with ADNOC Drilling, the business will continue to grow and deliver outstanding performance for our customers. We look forward to expanding our broader strategic partnerships with key regional leaders across the energy value chain, in line with SLB’s focused regional growth strategy."

ADNOC Drilling continues to record strong growth, fuelled by the expansion of its onshore and offshore fleets, as well as the continued growth of the oilfield services (OFS) segment and new joint ventures launched in 2024. The company now has the largest fleet in the Middle East, seeing net profits rise by 26% in 2024 to US$1.3bn.

Egypt needs to secure LNG and LPG deals at competitive prices.

The Gulf can help stabilise Egypt’s energy market, says leading energy and commodity trading firm BGN International

From the sun-scorched ports of Alexandria to the industrial sprawl of Suez, Egypt’s energy story is at a critical turning point. For decades, the country enjoyed the luxury of being a net exporter of natural gas, with domestic production more than meeting its own needs. Today, that narrative has flipped. Rapidly rising domestic energy demand – projected to surge by 39% this decade – combined with a worrying decline in local production has left Egypt increasingly dependent on imported fuel. In a country where economic stability and political calm are tightly bound to energy security, this imbalance has become a pressing concern.

The solution doesn’t lie in short-term fixes but in a strategic, Gulf-backed reset of Egypt’s energy market. That means securing long-term LNG and LPG supply deals at competitive prices and, just as critically, using those partnerships to create local jobs, transfer vital technology, and give Egyptians a more active role in powering their economy.

This is not merely an economic argument – it’s a political imperative. With youth unemployment at 19.7% among those aged 20-24, Cairo needs to turn energy investments into engines of job creation. Collaborations with multinational players should go beyond resource extraction, focusing instead on empowering local talent to build, operate, and eventually lead the country’s energy infrastructure. Gulf investment, if properly structured, can help catalyse this shift by demanding that technology transfer and domestic workforce development are baked into every deal.

Addressing supply gaps

Yet, even with the right partners, time is short. Egypt recently issued a tender seeking four LNG cargoes for delivery between February and March, a clear signal that near-term supply gaps must be addressed immediately. Fulfilling urgent gas needs through last-minute tenders would be better served with longer term contracts with serious natural gas players like Dubai-based BGN International, an energy and commodity trading firm with an extensive natural gas division.

The firm already contributes to Egypt’s oil sector through its large stake in the Canadian company Mediterra Energy and its gas operators are steadily growing there. As the largest buyer of LPG from the United States and a key player in global oil and gas flows, BGN has the reach and logistical muscle to secure competitive LNG contracts at a time when Egypt’s import needs are becoming both more urgent and more expensive.

But stabilising Egypt’s energy future isn’t just about meeting domestic demand – it’s about revitalising exports and reasserting the country’s role as a regional energy hub. Egypt already boasts significant infrastructure, from the Idku and Damietta LNG export terminals to its extensive pipeline network. What’s required now is a fresh approach that integrates these conventional assets with forward-looking investments in transition fuels like LPG and LNG.

Flexible approach needed

Here again, companies like BGN International offer a potential model. With decades of experience balancing crude operations alongside transition fuels like natural gas, they demonstrate how energy traders offer countries a flexible range of resources to power economies sustainably. If Egypt can replicate this dual approach – leveraging its geographic advantages while modernising its energy offerings – it could once again become a key exporter to Europe and beyond, even as global markets shift toward cleaner energy solutions.

In the end, the challenge facing Egypt is about more than energy. It’s about restoring confidence – in its economy, in its political stability, and in its role on the global stage. Gulf partnerships can provide the capital and expertise to make that happen. But for those investments to truly pay off, they must come with a commitment to building Egypt’s future not just from beneath the ground – but from within its people.