Gulf oil production is set to reach 26 million bbl/d by 2025
March 2019

Gulf oil production is set to reach 26 million bbl/d by 2025

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Oil production in the Arabian Gulf region is expected to grow over the next five years, and a number of countries including Iraq, Kuwait and UAE are seen to contribute to the output expansion. This article assesses the Gulf E&P status and outlook, illustrated by the three key drivers: production, exploration success and spending.

Figure 1: A bar chart showing Arabian Gulf oil production split by countries in thousand bbl/d. Source: Rystad Energy UCube, March 2019

Figure 1 depicts oil production (including crude and condensate) for the Gulf region from 2010 to 2025, split by countries. Production in the region has increased from 17.8 million bbl/d in 2010 to 24 million bbl/d in 2018. This year, output is expected to increase by around 75,000 bbl/d. Saudi Arabia, the largest producer in the Middle East, is expected to keep oil supply rather flat year-on-year, in line with the OPEC+ cut agreement reinstated in December 2018. We estimate oil production in the region to grow by ~300,000 bbl/d per year from 2019 to 2025 with the biggest contributions coming from Iraq, Kuwait and UAE. In Iraq, the phase 2 of Majnoon redevelopment field planned for 2021 plays a key role in production ramp-up in the country. Similarly, the phase 2 of Garraf field projected for start-up in 2020 is set to add 100,000 bbl/d at plateau. Saudi Arabia is currently anticipated to keep supply rather flat even after OPEC agreement has expired in order to avoid oversupplied market. In such a way, oil production in the Gulf region is set to stand at around 26 million bbl/d by 2025.

Figure 2: A bar chart showing the discovered oil volumes in the Arabian Gulf by country in Million bbl. Source: Rystad Energy UCube, March 2019

Figure 2 shows the discovered oil volumes for the Gulf countries from 2010 to 2018. Iraq notably dominates the exploration success achieved over the last decade, as around 45% of total discovered resources are from Iraq. In 2013-2014, Mirawa, Amara South and Faihaa were discovered in Iraq. More recently, Rosneft discovered the Salman oil field in May 2018. Other key discoveries in the region include Saudi Arabia’s Janab and Faskar fields, which account for 80% of the oil resources discovered in the Gulf in 2015. Over the last three years, the discovered resources have decreased dramatically, with an estimated 140 million boe discovered last year. Overall, nearly 75% of the total oil resources discovered in the region since 2010 have not been put into development yet.The majority of these discoveries have a breakeven price below 50 $/bbl, and over 90% have a breakeven below 60 $/bbl, suggesting a vast resource potential with competitive economics even in a low oil price environment.

Figure 3: A chart showing the total Arabian Gulf oil field spending by category in USD million from 2010 to 2025.Source: Rystad Energy UCube, March 2019

Figure 3 shows the total spending on oil fields in the Gulf region from 2010 to 2025. Spending levels have been increasing steadily until 2014, when the peak of $99 billion was reached. Following the oil price collapse, spending has declined by ~7% in 2015-2016. In 2017, total investments remained rather flat and grew by 5% in 2018. Oil field spending is projected to grow by additional 7% per year during 2019-2020. Total oil field expenditures are estimated to hit 2014 levels again by 2020 and reach nearly $140 billion by 2025. During this time period, Saudi Arabia is expected to increase capital investments the most. Total capital and exploration expenditures are set to grow by 30% between 2019 and 2025, directed both to mature asset base and new discoveries. Among unsanctioned fields, expansions of Marjan, Berri and Zuluf fields will see the largest capital contribution in the years to come. Furthermore, Iraq is also among the countries that are leading in terms of the capital investment increase in the longer term. A large part of the growth comes from already producing projects, including the redevelopment of Rumaila North and South, and Zubair and Qurna West (phase 1) fields, as well as currently unsanctioned projects.


The Gulf region’s oil production is expected to grow in the medium to longer term, with highest growth projected in Iraq. Recent discoveries expected to be sanctioned or currently under development are key for this output expansion. Additionally, investments into expansion and redevelopment projects, notably in Saudi Arabia and Iraq, will further contribute to higher future oil production, with the oil supply estimated to reach 26 million bbl/d by 2025.