Oil price fall could constrain projects expenditure
7 April 2025
Register for MEED’s 14-day trial access
The sudden fall in oil prices following the imposition of worldwide import tariffs by the US could have severe consequences for the GCC projects market.
In the five days since US President Donald Trump’s tariffs announcement on 2 April, the price of West Texas Intermediate (WTI) has fallen from $72.1 a barrel to $60.5 a barrel, a drop of 16%, as stock markets plunged across the world and fears over future crude demand increased.
Despite some successes with economic diversification in recent years, the region’s projects market is particularly sensitive to oil price changes given that the majority of projects are funded directly by the state or government-related entities.
Historically, this is reflected by a strong correlation between oil prices and contract awards. After reaching record highs in 2013 and 2014, the sharp fall in prices in late 2014 from more than $100 to as low as $26 a barrel in early 2015 led to a sustained slump in project activity in the ensuing seven years. It was only when oil started to rise after the 2020 pandemic that projects expenditure started to recover.
The most direct historical comparison was the period 2016-21, when annual average crude prices were $57 a barrel. Over those same years, excluding Covid-hit 2020, annual contract awards averaged just $117bn, less than half the record value of work let in 2023 and 2024, when the oil prices were more than $80 a barrel.
However, the same data from regional projects tracker MEED Projects highlights that there tends to be a 12-month lag between declines in oil prices and a visible impact on new contract awards. This is presumably due to the time it takes for falling revenues to filter through to state budgets in the following financial year.
It remains too early to tell whether the recent fall in the oil price will be sustained or whether some softening of the US’ tariff policy will alleviate demand concerns. But if crude continues to drop, it is inevitable that spending on projects will have to slow, even if not immediately.
Data source: MEED Projects
Exclusive from Meed
-
Abu Dhabi takes the lead in green steel transition
14 October 2025
-
Kuwait makes major offshore gas discovery
14 October 2025
-
BP awards Egypt well drilling contract
14 October 2025
-
Kuwait tenders oil field electrification works
14 October 2025
-
Tunnel projects set pace for UAE water sector
14 October 2025
All of this is only 1% of what MEED.com has to offer
Subscribe now and unlock all the 153,671 articles on MEED.com
- All the latest news, data, and market intelligence across MENA at your fingerprints
- First-hand updates and inside information on projects, clients and competitors that matter to you
- 20 years' archive of information, data, and news for you to access at your convenience
- Strategize to succeed and minimise risks with timely analysis of current and future market trends

Related Articles
-
Abu Dhabi takes the lead in green steel transition
14 October 2025
Abu Dhabi’s latest move to position itself at the forefront of the global transition to low-carbon heavy industry is the launch of TrueGreen, a new sustainability identity by Emsteel Group that unifies the company’s decarbonisation efforts.
The initiative reflects more than a decade of investment in green technologies, partnerships and innovation designed to transform one of the world’s most carbon-intensive industries into a cornerstone of the UAE’s Net Zero 2050 agenda.
It also highlights Abu Dhabi’s growing status as a hub for sustainable steelmaking and hydrogen-enabled manufacturing – sectors that will play a defining role in the energy transition.
At the launch event in late September, Emsteel Group CEO Saeed Ghumran Al-Remeithi described TrueGreen as the result of years of prudent decision-making. “From day one, we chose the right technology – electric arc furnaces – setting a cleaner foundation for our industry,” he said.
“We became the first steel company in the world to capture carbon dioxide (CO2) emissions, and today our production process has 45% lower carbon intensity than the global average. TrueGreen is a declaration of our unwavering commitment to sustainable steel, built on decades of innovation and delivered as a transparent, verifiable advantage for our customers.”
Industrial plans
What began as Emirates Steel, a key pillar of Abu Dhabi’s industrial diversification strategy, has evolved into Emsteel Group, the region’s largest publicly listed steel and building materials company, following its merger with Arkan Building Materials in 2021. Over that time, the company has taken key steps to align with Abu Dhabi’s broader vision of an industrial base that is globally competitive, digitally advanced and environmentally responsible.
Al-Remeithi noted that sustainability has always been part of the company’s DNA. “This is not new for us,” he said. “Sustainability has been in our DNA from the beginning. Since 2019, we have reduced Scope 1 and 2 emissions by 23%. By 2030, we aim for a 40% reduction in greenhouse gas emissions in steel production and 30% in cement, and by 2050 our goal is net zero across the group.”
Those efforts have already delivered tangible results. Emsteel’s low-carbon rebar has been used by Aldar in constructing Abu Dhabi’s first net-zero-carbon mosque on Yas Island. The project demonstrates that there is a practical application for green materials in the emirate’s built environment and sets a precedent for the UAE’s wider decarbonisation targets that call for a 79% reduction in built-environment emissions by 2035.
Another important part of Abu Dhabi’s green steel ambitions came a year earlier, when Emsteel announced a green-hydrogen pilot project with UAE-based Abu Dhabi Future Energy Company (Masdar) and private equity company Mubadala – the first of its kind in the Middle East. The partnership, which began production in late 2024, uses renewable hydrogen to extract iron from ore, replacing fossil fuels in one of the most energy-intensive steps of the steelmaking process.
The hydrogen used in the project is certified under the ISO 19870 standard and verified by Bureau Veritas, ensuring the integrity of its green credentials. “Our partnership with [Abu Dhabi National Oil Company] Adnoc, Mubadala and Masdar is advancing carbon capture and green-hydrogen steelmaking, turning ambition into operational reality,” Al-Remeithi said. “This is how we move from vision to measurable impact.”
For Abu Dhabi, green hydrogen is a natural extension of its role as a global energy producer transitioning towards cleaner fuels. Through initiatives led by Masdar, Taqa, Adnoc and Emsteel, the emirate is laying the foundations for an industrial ecosystem where green molecules – hydrogen, ammonia and e-fuels – become the feedstock for low-carbon manufacturing.
The launch of TrueGreen brings these achievements together under a coherent brand and data-driven certification framework. All TrueGreen steel products come with independently verified Environmental Product Declarations and digital traceability systems that provide batch-specific carbon data, allowing contractors, developers and financiers to track emissions with unprecedented precision.
“Developers face stricter regulations and investor pressure,” Al-Remeithi said. “Sustainability is no longer optional – it is a must for growth. Emsteel is your partner to thrive in this new reality, offering years of investment and innovation in a framework that transforms environmental leadership into direct value for our customers.”
Industrial strategy
The emirate’s leadership in green steel is part of a broader industrial strategy anchored in Operation 300bn and implemented by the Ministry of Industry & Advanced Technology (MOIAT). The strategy seeks to strengthen national manufacturing while ensuring that growth is consistent with the UAE’s net-zero trajectory.
Emsteel’s progress illustrates how this dual mandate can work in practice. Through its partnerships with Adnoc on carbon capture, Masdar on hydrogen and MOIAT on green certification, the company is helping shape the policy and technology frameworks that will define the region’s next industrial phase.
The importance of Abu Dhabi’s leadership extends beyond national borders. According to UK analytics firm GlobalData, the steel industry is responsible for up to 8% of global carbon emissions, making it one of the most challenging sectors to decarbonise.
By investing early in clean technologies and aligning with global frameworks, Abu Dhabi is positioning itself to supply the next generation of low-carbon materials demanded by global developers and infrastructure financiers.
“Our focus is clear,” Al-Remeithi said in closing. “To deliver high-quality products and sustainable solutions that meet the needs of today and tomorrow. In this journey, your trust and partnership remain essential.”
https://image.digitalinsightresearch.in/uploads/NewsArticle/14844724/main2515.jpg -
Kuwait makes major offshore gas discovery
14 October 2025
State-owned upstream operator Kuwait Oil Company (KOC) has made a “landmark” gas discovery in the Jazah offshore area, according to its parent company Kuwait Petroleum Corporation (KPC).
KPC said the discovery has produced the highest vertical well flow in Kuwait’s history from the Maqwa formation.
The well has produced more than 29 million cubic feet a day of gas and more than 5,000 barrels a day of condensates.
In a statement, KPC said: “This milestone reflects the success of KOC’s offshore exploration strategy and supports the KPC 2040 vision to enhance energy security and drive sustainable growth.”
In a separate statement, KOC said the newly discovered reserve contains an estimated 1 trillion cubic feet of gas.
KOC also estimated that the field covers an area of about 40 square kilometres.
The majority of Kuwait’s existing oil and gas discoveries are onshore.
This is only the third discovery that has been made in Kuwaiti waters and differs from the previous two, which were primarily oil.
Its first offshore find in 2024, the Noukhadha field, contains about 3.2 billion barrels of oil equivalent.
In January, KOC announced its second offshore discovery at the Julaiah field, holding 800 million barrels of crude and 600 billion cubic feet of associated gas.
Kuwait began offshore exploration as part of its investment strategy to meet future oil demand and received its first offshore drilling rig in mid-2022.
https://image.digitalinsightresearch.in/uploads/NewsArticle/14861672/main5954.jpg -
BP awards Egypt well drilling contract
14 October 2025
BP has awarded a contract to Valaris, a US offshore drilling contractor, to drill five new offshore gas wells in Egyptian waters.
According to a statement from Egypt’s Ministry of Petroleum & Mineral Resources, the wells will be drilled in BP’s Mediterranean concession areas at water depths of 300-1,500 metres using the Valaris DS-12 deepwater drilling rig.
The drilling contract follows a preliminary memorandum of understanding that BP signed in September with Egyptian Natural Gas Holding Company.
Karim Badawi, Egypt’s minister of petroleum and mineral resources, said that BP’s gas projects in the Mediterranean are key to boosting domestic gas production and securing new resources to meet demand during peak summer consumption.
He added that the Egyptian government’s support would accelerate BP’s projects, aiming to increase local gas production over the next year while discovering new reservoirs to enhance Egypt’s production capacity and reduce import needs.
BP is expected to start operations for its new upstream campaign in 2026, according to Egypt’s oil ministry.
The programme’s scope will include improving the efficiency of offshore and onshore infrastructure in the West Nile Delta area.
Wael Shahin, BP’s Egypt country manager, said that the DS-12 rig will enable BP to build on the success of its recent exploration campaign and accelerate production from new discoveries.
BP has been active in Egypt’s oil and gas sector for 60 years.
The new drilling campaign follows BP’s exploration activities in the first half of 2025, which led to two new gas discoveries in the West Nile Delta basin.
These discoveries are known as Fayoum-5 and King-2.
https://image.digitalinsightresearch.in/uploads/NewsArticle/14861673/main2848.jpg -
Kuwait tenders oil field electrification works
14 October 2025
State-owned upstream operator Kuwait Oil Company (KOC) has issued a tender for the construction of new electrical infrastructure at Kuwait’s Bahra field.
An initial meeting with bidders is due to take place on 12 November, and KOC has set a bid submission deadline of 11 January next year.
The tender is focused on developing a new 72MW power station and associated overhead power lines.
Over recent months, Kuwait has seen an uptick in tender activity in its oil sector as it seeks to boost upstream production.
Earlier in October, KOC awarded contracts worth KD679.4m ($2.2bn) for the supply, installation, surveillance and maintenance of electrical submersible pumping systems.
Also in October, bids were submitted for five major oil projects in Kuwait worth a combined total of $6.55bn.
The tenders included projects to develop separation gathering centres as well as effluent water disposal plants.
ALSO READ: Low bid worth almost $1bn submitted for Kuwait oil project
https://image.digitalinsightresearch.in/uploads/NewsArticle/14861674/main3755.jpg -
Tunnel projects set pace for UAE water sector
14 October 2025
The UAE’s water sector has recorded $1.91bn in contract awards so far in 2025, a more measured pace than in recent years, but one that comes ahead of a potentially transformative 12 months for the market.
The total is lower than the $3.10bn awarded in 2024 and the $6.15bn in 2023, reflecting a year focused on network expansion rather than large-scale production assets. Only one major desalination project has reached the contract stage so far this year. The $400m Saadiyat seawater reverse osmosis independent water project (IWP) in Abu Dhabi, awarded to Spain’s Acciona, remains the single largest contract signed to date.
Most of this year’s awards have come from Dubai Municipality through a series of mid-sized contracts, generally in the $50m to $150m range, covering stormwater, sewerage and drainage upgrades.
DSST programme
The next phase is already taking shape, however, with several major projects moving through procurement. The largest is Dubai Municipality’s $22bn Strategic Sewerage Tunnel Programme (DSST), which represents most of the country’s current pipeline.
In September, the municipality issued a refresher request for qualifications (RFQ) for the next phase of the DSST public-private partnership (PPP) project, which aims to increase total sewage treatment capacity by 1 million cubic metres a day to serve an expected population of 6.3 million by 2040.
The scheme, which also aims to reduce the number of pumping stations from 70 to just two, involves the construction of deep tunnels, terminal pumping stations and extensive sewer links.
Four contracts under the Warsan and Jebel Ali components of the DSST have now advanced to prequalification. The $5bn Warsan Package W will deliver a 16-kilometre deep tunnel and a terminal pumping station with a capacity of 830 million litres a day.
The Jebel Ali packages, known as J1 North, J2 South and J3 Links, will extend the network across the southern corridor. The J3 package includes the construction of 129km of sewer links and will be implemented under a design-build-finance PPP model, featuring a concession period spanning 25 to 35 years. Bidding for all four packages is set to begin soon, with contract awards targeted for March 2026.
Tasreef project
The $8.2bn Tasreef wastewater and drainage programme is also advancing. The initiative aims to expand Dubai’s rainwater drainage network and boost capacity by 700% by 2033.
In April, local firm DeTech Contracting won the $136m first contract to upgrade the West Deira stormwater system. The remaining contracts for work in Jebel Ali, Dubailand and on Sheikh Mohammed Bin Zayed Road/Al-Yalayis Road are at the bidding or bid evaluation stage. These are expected to be awarded later this year, or in early 2026.
Tender pipeline
Beyond tunnel works, the overall tender pipeline is valued at $30.98bn, including $1.68bn of pipeline projects and $1.39bn of treatment plants, with smaller packages covering pumping stations, district cooling and reservoirs. The makeup shows how the market is entering an investment phase focused on water networks that will prepare the system for the next round of large-scale capacity projects later in the decade.
Over $2bn-worth of projects are currently under bid evaluation, with some of these projects expected to move to award before the end of the year, which could bring the 2025 total closer to last year’s figure.
This includes a contract for the construction of a $400m district cooling plant project on Palm Jebel Ali, set to be awarded under a joint venture of National Central Cooling Company (Tabreed) and Dubai Holding.
In Ras Al-Khaimeh, plans are moving forward for the emirate’s first sewage treatment plant to be developed under a PPP model. Two consortiums have submitted bids to develop and operate the 60,000 cubic-metre-a-day facility.
While Dubai Municipality has driven most of this year’s activity, other entities have also played a role. Emirates Water & Electricity Company’s (Ewec) Saadiyat IWP has been the largest single contract, alongside network and stormwater awards from Al-Dhafra Region Municipality, Abu Dhabi Sewerage Services Company, Etihad Water & Electricity and Dubai Electricity & Water Authority.
The pattern of activity this year aligns with previous investment cycles. Periods of heavy desalination and treatment awards are typically followed by phases of large-scale network development. While 2025 has so far been steady rather than headline-grabbing, the outlook is significantly stronger.
With more than $2bn in projects under evaluation and nearly $31bn in the tender pipeline, the UAE’s water sector is on the brink of a major investment wave. The DSST, Tasreef and a series of supporting network initiatives are expected to define this next phase, laying the groundwork for future capacity expansion.
MEED's November 2025 special report on the UAE also includes:
> GOVERNMENT: Public spending ties the UAE closer together
> ECONOMY: UAE growth expansion beats expectations
> BANKING: Stability is the watchword for UAE lenders
> UPSTREAM: Adnoc strives to build long-term upstream potential
> DOWNSTREAM: Taziz fulfils Abu Dhabi’s chemical ambitions at pace
> POWER: UAE power sector hits record $8.9bn in contracts
> CONSTRUCTION: UAE construction faces delivery pressures
> TRANSPORT: $70bn infrastructure schemes underpin UAE economic expansionhttps://image.digitalinsightresearch.in/uploads/NewsArticle/14862489/main.jpg