RIYADH: Oil and gas will remain the backbone of global energy markets despite growing momentum for renewables, the Arab Energy Organization’s secretary-general said, urging the region to broaden its energy mix.
Speaking at the release of the AEO’s second-quarter 2025 monitoring report on renewable energy, energy transition, and climate change, Jamal Al-Loughani said the region must adopt multiple energy sources.
The AEO, formerly the Organization of Arab Petroleum Exporting Countries, was restructured and renamed following a Saudi proposal adopted during its 113th ministerial meeting in Kuwait in December 2024. The move reflects efforts to expand its mandate beyond petroleum to cover the full spectrum of energy developments.
The restructuring comes as rapid transformations reshape the global energy sector, compelling Arab states to adapt to broader trends in clean technology and sustainable investments.
“Diversification of the energy mix is essential, but no source should be excluded,” Al-Loughani said in a statement to Kuwait News Agency.
“Oil and gas will continue to dominate with a share of over 50 percent both now and in the future,” he added.
The secretary-general attributed oil and gas’s continued dominance primarily to growing demand across all economic sectors, including transportation and electricity, and their increasing necessity in various industries such as petrochemicals, fertilizers, and heavy manufacturing.
He said increased investment and innovation by the organization’s member states in clean technologies like carbon capture, utilization, and storage will make the petroleum industry more sustainable and reliable in meeting growing energy demand.
The report noted a “significant global expansion in the renewable energy sector during the second quarter 2025, driven by major investments and supportive policies.”
China maintained its global leadership, accounting for half of the world’s solar capacity, advancing the largest floating wind turbine, and beginning construction on the world’s biggest hydroelectric dam.
In the US, clean energy provided most of the electricity for three consecutive months for the first time. India also saw a sharp rise in added renewable capacity, supported by solar projects.
Al-Loughani said many Arab nations have adopted policies supporting renewables based on economic diversification. Despite this positive momentum, he also said the sector faces challenges, most notably political and regulatory instability in some markets.
“Enhancing the infrastructure for renewable energy projects is no longer an option but has become a necessity,” as climate risks increase significantly alongside growing global interest in renewable sources, he added.
The AEO secretary-general outlined the Arab world’s potential for competitively priced green hydrogen production, which can be used for decarbonization directly or through derivatives like ammonia. This could attract foreign investment, create quality jobs, improve trade balances, and add value through exporting low-carbon products.
“Achieving success in energy transitions requires aligning ambitions with executive capabilities through adopting realistic steps, pumping long-term investments, and establishing reliable regulatory frameworks,” he said, adding that effective energy transitions are no longer just an environmental issue but a foundation for economic stability.
A significant financing gap remains, with over 90 percent of global clean energy investments since 2021 going to advanced economies and China, despite 80 percent of future energy demand growth coming from developing nations, Al-Loughani said. This reflects a structural imbalance that must be addressed to ensure a just and effective global energy transition.
He also highlighted nuclear power as a pivotal strategic option for enhancing global energy security and reducing emissions, with small modular reactors opening new prospects. Furthermore, he identified critical metals markets as a strategic element for the clean energy transition, though geopolitical constraints could pose crucial tests for global supply chains.
Regarding the digital economy, Al-Loughani said that data centers are now a vital part of global infrastructure, and their role is expected to grow with the advancement of artificial intelligence. Sustaining this growth requires major coordination to ensure clean power and develop innovative solutions to reduce consumption.
He also said climate change is no longer a long-term challenge, but a reality that requires urgent global action for adaptation, mitigation, and protection.
Al-Loughani added that the UN’s COP30 conference must be a turning point that is not limited to achieving ambitions, but also includes justice, equity, and finance for those who face the risks of climate change.
He also cited artificial intelligence as holding significant potential to reduce greenhouse gas emissions by improving energy efficiency, distribution, and disaster management.
