Middle East Green Energy Push Could Reshape Long-Term Global Oil Demand

A major shift toward renewable energy in the Middle East could begin materially affecting global fossil fuel demand after 2040, according to a new industry report. This long-term outlook highlights the enduring but evolving competitive landscape for oil-producing regions like North Dakota's Bakken.

According to the Energy Transition Outlook 2026: Rise of Renewables in the Gulf Region from risk management firm DNV, the Middle East and North Africa (MENA) region is poised for massive renewable growth. The report forecasts 860 gigawatts of solar PV capacity will be installed from now until 2040, with an additional 2,200 GW of solar and wind added between 2040 and 2060. By 2060, 92% of MENA's electricity generation is expected to be from non-fossil sources, up from just 14% in 2024.

Despite this build-out, analysts identify 2040 as a key tipping point. Only then do they expect growth in non-fossil electricity generation to outpace the region's rising power demand, which is driven by population growth, cooling needs, industry, and new data centers. At that point, fossil fuel use for power generation in the region would peak and "an actual energy transition will begin," the DNV report stated.

For Bakken operators, the Middle East's move reinforces the global pressure to lower the carbon footprint of produced barrels. The source report notes that Middle Eastern LNG exporters face upcoming European Union regulations on methane leakage, compelling them to reduce emissions. This dynamic increases global attention on methane management, a key focus for North Dakota's oil and gas industry.

The region is also investing in carbon capture and storage (CCS) and low-carbon fuels, leveraging its existing infrastructure and natural storage capacity. "CCS has a lot of potential for the region, where Saudi Arabia, the UAE, and also Qatar are actually planning a lot of capacity in the next few years," said Saravanan Manivel, Director for Low Carbon Fuels at ENGIE Global Energy Management & Sales, at a recent Dubai conference. He added that the region is "quite well placed for both green and blue ammonia."

This strategic pivot by some of the world's lowest-cost oil producers signals a future where hydrocarbons compete not just on price but on carbon intensity. The long-term forecast suggests global oil demand may face increased pressure post-2040, underscoring the importance for the Bakken to maintain its position as a low-cost, environmentally competitive basin through operational efficiency and emissions reduction technologies.