Dubai, Jan 12 — The Middle East is on track to attracting more than $100 billion (Dh370b) annually in strategic capital expenditure by 2026, spread across oil and gas, renewable energy, healthcare, digital infrastructure and manufacturing, according to a comprehensive industry outlook by Grand View Research (GVR).
Despite the global energy transition, the region – led by the United Arab Emirates and Saudi Arabia – is expected to maintain leadership in hydrocarbon supply while rapidly scaling wind, solar, battery storage and digital transformation initiatives.
Oil & Gas: Sustained output with technology integration
The UAE and its Gulf peers collectively account for roughly 30% of global oil production and 17–18% of gas output, underscoring the region’s continued centrality to energy markets. While forecasts point to modest global oil demand growth and potential supply surpluses by 2026, gas demand is expected to rise around 3.5%, driven by power generation, industrial growth and LNG exports.
“The Middle East’s oil and gas sector remains a market anchor but the pace of technology adoption and export infrastructure expansion – particularly LNG – is what will define competitiveness into 2026,” said Swayam Dash, Managing Director at Grand View Research.
UAE producers are deploying digitalisation programs incorporating AI, IoT, drones and robotics to reduce costs, enhance inspection efficiency, and lower maintenance overheads. Carbon capture and storage (CCS) and early hydrogen projects – including green hydrogen facilities supported by the UAE Energy Strategy 2050 – are emerging alongside traditional projects.
Renewables & Batteries: Rapid scale-up in a sun-rich region
Renewables are expanding swiftly across the Gulf, with the UAE targeting expanded solar and wind capacity as outlined in the Net Zero by 2050 Strategic Initiative. Solar auction prices have fallen sharply, supporting cost competitiveness versus gas.
Battery storage is also gaining momentum as a core element of grid planning, particularly to stabilise renewable-heavy networks. Saudi Arabia and the UAE are mandating storage alongside new solar and wind builds, with utility-scale systems commonly co-located with renewable farms.
“The breadth of renewable and storage investment across the UAE reflects a strategic pivot — not away from hydrocarbons, but toward a balanced, resilient energy mix,” Dash said. Dubai has announced plans for multi-gigawatt renewable additions by 2030, and Saudi Arabia recently unveiled major solar and hydrogen capacity goals under Vision 2030.
Healthcare: Economic sector, not just social service
Healthcare in the Middle East, especially in the UAE, has moved beyond social infrastructure toward economically strategic investment. In 2023, Dubai hosted over 690,000 medical tourists, contributing more than Dh 1 billion (≈ USD 280 million) to healthcare revenues and stimulating travel, hospitality and allied services.
The UAE’s National Digital Health Strategy – integrating Riayati, Malaffi and Nabidh into shared electronic health records – positions the country as a regional leader in interoperable digital care systems, with more than 1.9 billion records consolidated across 3,000 facilities.
GVR anticipates that digital health, AI-enabled diagnostics and virtual care platforms will drive procurement-led growth by 2026, as GCC states focus increasingly on private sector engagement, specialty services and integrated care ecosystems.
Data Centres & Cloud: Digital infrastructure soars
Digital infrastructure is emerging as a priority growth engine. The GCC data centre market is projected to grow at around 13% CAGR through 2030, with the UAE and Saudi Arabia together accounting for an estimated 65–70% of capacity additions.
Cloud adoption in the Middle East is also accelerating, with nearly 75% of organisations expected to rely predominantly on cloud platforms by 2026. This shift is boosting regional spending on cybersecurity, Zero Trust frameworks and enterprise digital tools.
“Cloud and data centre growth in the UAE is not merely about connectivity – it’s about enabling digital government services, fintech ecosystems and AI adoption that redefines competitiveness,” Dash said.
Manufacturing, chemicals & circular economy
The UAE and wider GCC remain global hubs for bulk chemicals, supported by low-cost feedstock. However, global overcapacity and tightening environmental regulation are propelling regional producers toward higher-value derivatives and integrated complexes.
Emerging materials – such as green steel and advanced composites – and circular plastics initiatives underscore a shift toward sustainable materials manufacturing aligned with UAE industrial strategies like Operation 300bn.
Strategic Outlook: Balanced diversification and resilience
By 2026, the region’s economic profile is expected to reflect balanced diversification through energy markets anchored in hydrocarbon supply and LNG export growth, renewables and storage scaling rapidly to meet climate, cost and energy security goals and healthcare and digital systems advancing through technology and integrated care models and data, cloud and advanced manufacturing underpinning digital transformation and industrial competitiveness.
“The breadth and scale of investment across sectors demonstrates the Middle East’s transition from resource reliance to technology-enabled, diversified growth,” Dash said. “The UAE, in particular, exemplifies how national strategy, policy clarity and capital discipline can unlock long-term value.”