The Middle East’s leading energy producers, including Saudi Arabia, the UAE and Qatar, are increasingly investing in renewable energy projects such as solar, wind and hydrogen, alongside their traditional oil and gas industries. Similarly, Azerbaijan is strategically managing its role as a major hydrocarbon exporter while expanding investments in renewable energy to build a more sustainable and robust energy future.

Nations across the world are recognising the need to reduce reliance on hydrocarbons for the following reasons:

• Economic diversification: there is a recognition that relying solely on oil and gas is unsustainable. Countries are expanding into technology, tourism, finance and manufacturing while diversifying their energy portfolios to ensure long-term economic and environmental stability. For instance, Saudi Arabia’s Vision 2030 focuses on reducing oil dependency by investing in sectors such as AI, tourism and finance, while the UAE has established itself as a global financial and logistics hub.
• Global energy transition: to remain competitive, nations are investing heavily in large-scale renewable energy projects like solar, wind and hydrogen. Landmark initiatives such as the UAE’s Mohammed bin Rashid Al Maktoum Solar Park – one of the world’s largest solar farms, and Saudi Arabia’s Green Hydrogen Project in NEOM showcase their commitment to a clean energy future. Additionally, this shift to renewables is driving new strategic collaborations, as oil-exporting nations partner in green energy ventures to future-proof their economies – a good example is Azerbaijan’s partnerships with firms like Masdar (UAE) and ACWA Power (Saudi Arabia) (Power Technology).
• Climate change mitigation: with growing pressure to cut carbon emissions, countries are implementing green policies and driving sustainable development to align with global climate goals. Qatar’s Sustainability Strategy for the 2022 FIFA World Cup, which included carbon-neutral stadiums and extensive use of solar energy, highlights efforts to reduce emissions (Visit Qatar). COP29 held in Azerbaijan in November 2024 focused on increasing climate finance while promoting global cooperation. A key outcome was the agreement for developed countries to provide at least $300 billion annually to developing nations by 2035, tripling the previous $100 billion target, to combat climate change (Cop 29).
• Energy security and influence: as energy security becomes a critical global priority, nations are adapting their strategies to mitigate supply disruptions, stabilise price volatility and maintain influence in the shift toward renewable energy. By taking the lead in clean energy, these countries shape global policies and secure long-term stability. For example, Saudi Arabia and the UAE play leading roles in organisations like OPEC+ and the International Renewable Energy Agency (IRENA).

The key question is whether energy diversification and transition can truly ensure geopolitical stability. While diversification enhances energy security by reducing dependence on a single source and mitigating risks associated with supply disruptions and price volatility, it is not a panacea. Geopolitical tensions, technological disparities and shifting market dynamics continue to shape the global energy landscape, meaning that no solution is without its challenges.

In conclusion, energy diversification is not only about improving energy security and sustainability but also about building economic resilience and fostering long-term prosperity. By lessening reliance on volatile energy markets and driving innovation in renewable technologies, nations can protect themselves from price fluctuations and supply shocks. Moreover, this shift enhances geopolitical influence, promoting energy independence and greater strategic leverage. Ultimately, these efforts are crucial for securing a stable, sustainable and prosperous future for generations to come.