Structurally higher Middle East energy spending this decade; Buy energy service companies

Research evidence excerpt

Structurally higher Middle East energy spending this decade; Buy energy service companies

MENA Energy

EQUITY RESEARCH Industry Report

June 16, 2026

Structurally higher Middle East energy spending this

Research Analysts: decade; Buy energy service companies

Scott Darling

+971 52 699 0785 With the potential resolution of the Middle East conflict, see news,

scott.darling@cantor.com

we expect not only higher energy capex in the region, but also a

more nationalistic approach to energy strategy. We believe the focus

for governments and companies in the Middle East will be on securing

adequate supply chains and domestic energy infrastructure (pipelines,

storage facilities and ports). We highlight Middle East energy service

companies as key beneficiaries of these trends and expect structurally

higher spending to persist through at least the end of the decade.

Regional conflict cessation to accelerate spending and new orders. We

see a rise in investment in onshore and offshore energy projects in the

Middle East as structural this decade. We forecast total energy capex CAGR

at c.4% pa over FY26-FY35 (vs 3.5% pa over FY16-FY25) and total capex to

increase from c.US$660bn in FY25 to almost US$950bn in FY35, driven not

only by upstream spending, but also midstream and downstream capex,

see Figure 1. We also expect further export routes for oil and natural gas

being developed in the region, as well as a rise in oil and natural gas

production capacity, see research. This reflects not only national energy

security reasons, but also our view that oil prices will remain structurally

elevated (our assumption for Brent is US$90/bl in 2026, US$80/bl in 2027,

US$70/bl in 2028 and we assume a long-run cost of oil at US$65/bl).