Energy investment across the GCC is creating increasingly complex supply chains, but scale is not the defining challenge. The greater risk is that conventional supplier oversight stops at the first tier, while the dependencies most likely to disrupt delivery remain hidden further down the chain.
Across the GCC, countries are investing to diversify their economies away from fossil fuels and meet ambitious net zero targets. For example, Saudi Arabia aims to generate 50% of its energy from renewables by 2030 while Oman aims for renewables to account for 20% of its energy mix by 2030 increasing to 39% by 2040.
https://www.mena2050.org/news/gcc-renewable-energy-goals-and-policies
As Saudi Arabia, the UAE, Qatar, Oman and Bahrain investing in both traditional energy production, renewables – solar and wind – and hydrogen and the infrastructure that supports it including upgrading and interconnecting national grids – supply chain complexity grows. Behind every major project is a network of contractors, manufacturers, service providers and specialist suppliers.
The scale of these developments creates significant opportunities for businesses across the region. It also makes supply chains harder to see and harder to manage. For energy businesses, the challenge is not simply whether the right suppliers are contracted. It is whether decision-makers can see far enough across the supply chain to identify critical dependencies, assess how disruption could spread and act before delivery is affected.
This requires a shift from supplier assurance to dependency assurance. Supplier assurance asks whether a contracted business is capable of delivering. Dependency assurance asks what that business relies on, which of those dependencies are critical and how quickly the organisation could respond if one failed.
A More Complex Energy Supply Chain
Energy supply chains have never been simple. Major projects can involve hundreds of businesses across multiple countries, with specialist equipment, materials and services moving through several tiers of suppliers before reaching the end user.
Saudi Arabia is expanding its gas production and infrastructure while continuing to invest in renewables and other areas of its energy transition in line with the 2060 net zero target. The UAE, which has committed to net zero by 2050, is investing in renewables, hydrogen and carbon management. Qatar is increasing its LNG capacity. Oman is developing its green hydrogen sector. Kuwait is investing in oil and gas production and refining capacity.
Beyond the GCC, Iraq is developing oil and gas projects alongside new solar power to help reduce domestic gas shortages. Egypt is investing in oil and gas exploration, LNG infrastructure and renewable energy, while Algeria continues to develop its role as a natural gas supplier to Europe through underwater pipelines.
These projects involve different energy sources and technologies, with suppliers often spread across multiple countries. This creates a wider network of businesses to understand, assess and manage.
The focus is not only on energy production.
Investment is also going into the infrastructure needed to support these developments. As electricity demand grows and more renewable generation is added, new and existing power systems need grid upgrades, regional interconnections and energy storage. Nuclear is also part of the region’s energy mix, with the UAE’s Barakah Nuclear Energy Plantalready supplying electricity.
Water is closely linked to energy across the region. Desalination is essential to meeting demand, and investment is increasingly focused on more efficient technologies and renewable-powered projects.
The region is also placing greater emphasis on developing local supply chains and increasing local sourcing. Saudi Arabia’s iktva programme is designed to increase local content and develop the capabilities of local suppliers, while the UAE and Qatar have introduced similar initiatives.
As investment grows, so does the number of businesses and relationships involved in delivering these projects. A project may rely on a particular manufacturer for a critical component, a specialist subcontractor for skilled labour or a logistics provider to move essential equipment.
That’s where risk becomes harder to see.
If any one of these businesses is unable to deliver, the impact can extend well beyond the supplier itself.
The Supplier You Know Isn’t Always the Supplier You Need to Understand
Procurement teams understandably focus on their direct suppliers. But some of the most important risks can sit further down the chain. A business may have robust processes for assessing its main contractors while having limited information about the businesses those contractors depend on. That makes it difficult to see where there is over-reliance on a particular supplier, country or source of critical equipment.
Supply chain mapping helps close that gap, giving businesses a clearer picture of who sits behind their key supplier relationships and where dependencies exist.
This matters most when a supplier provides something that’s difficult to replace.
Technology Is Changing the Supply Chain
Technology is also changing the types of suppliers energy businesses rely on.
AI, robotics, remote operations and digital systems are becoming more common across the sector. At the same time, businesses are bringing in new technologies and specialist suppliers to support decarbonisation and reduce emissions.
This means energy businesses are working with a wider range of suppliers alongside their traditional contractors and service providers.
That brings new questions when assessing suppliers.
Do they have the right technical expertise? Can they support critical systems when they’re needed? What happens if their service is disrupted?
As energy operations become more reliant on technology, understanding these suppliers is becoming just as important as understanding those providing physical equipment and services.
Resilience Starts Before Something Goes Wrong
The value of understanding the supply chain becomes most obvious when something goes wrong.
A critical supplier could be affected by financial difficulties, a shortage of skilled workers, logistics disruption or geopolitical events. If an energy business knows where those dependencies are, it’s in a better position to respond.
It may be able to identify another supplier, review its contingency plans or put alternative arrangements in place before a disruption affects the wider project.
For major energy projects, this is particularly important. Replacing a supplier once a project is underway can be costly and difficult, particularly where specialist equipment or skills are involved.
Energy Week Riyadh
With Energy Week Riyadh taking place in Saudi Arabia, the focus will be on the developments shaping the energy sector across the region.
As the industry continues to grow and diversify, supply chains will also need to adapt. The businesses supplying equipment, technology, skills and services will all have a role to play.
For energy businesses, understanding those supply chains and the businesses within them will be an important part of managing the risks that come with this growth.
