EVs as the dethroner of oil in Middle East

“Oil“the fuel of the Middle East

Oil is one of the most important materials known to this day. It is even one of the materials that is strategic to the world that we live in. Oil is here to make our cars run as we want. It is here to make so many more materials needed to run smoothly in many aspects of our day-to-day lives. Today’s world is powered by it, but it is not material that is infinite and not everywhere. One of the places where we can find this strategic material is in the Middle East. Middle East is to this day one of the biggest suppliers of this strategic material. The oily industry of the Middle East is very much known to everyone and it affects practically everybody in their day-to-day life if they are using a car or even taking a jacket that is made out of deliberate materials. The Middle East is known for its huge supply of this strategic material and is among the most known for trading with it. The Middle East has a practical culture built around oil and is part of many lives of people in the Middle East. The question is … Will the electric car industry somehow impact the Middle East oil industry?

Middle East and its Oil industry was always one of the most important. Oil from the Middle East is known for being more eligible to make rubber out of it, due to its better conditions for mining this strategic material. Mainly as anyone says something about Oil everybody will instantly get fuel for cars in their minds. Middle East Oil companies indeed represent more than one-third of world Oil production. The habit of Middle Eastern oil is known even from the Second World War when fuel was also one of the most important supplies to win the war. At that time there was a huge demand for Middle East oil that was on that time very cheap when one barrel of Oil was approximately six dollars per barrel. As many people know and it is common knowledge Oil from the Middle East is practically running the world as we know from years earlier when there was ongoing conflict in Israel in the Middle East. At this time oil companies in the Middle East made an embargo for trading oil with states that supported Israel in their ongoing war which was practically most of the Western world. This time of Middle East history is known as the Oil crisis of 1970. On the other hand, Oil is one of the main income streams for many Middle Eastern states and their companies which are making life there practical live in heaven for many tourists who want to see those luxury lifestyles mainly coming from trading with oil.

With all of this, we can for example bring up Saudi Arabia which is one of the most impactful at this time in the Middle East. Saudi Arabia on their own produced and exported over 11 million barrels which is about 11 % of world demand. With all of that Saudi Arabia is in second place right after the USA which made a big step into the oil sphere. It can also be seen that the Middle East is very important due to this section.

Electric cars as the future is today!

In the present there we can see the new thing that comes into our day-to-day lives which can massively impact our lives. It is a new thought that has been in our heads for around 5 or more years. At present there is a huge thought of protecting our planet and everything that people never took care of. Being green and protecting everything that is made by nature. Oil and gas fall into this category due to the production of CO2 that is destroying our planet with each day and with our produce our planet cannot effectively retrieve its former self.

These days people can see that there is a big pressure to end oil and cars running on gas. We can see many states with their moves to start supporting being green and their moves in bringing electric vehicles to day to day-to-day lives of every person. Electric cars have their positive outcomes like lowering the traffic. Its futuristic look is loved by many people who are into the futuristic looks of the vehicles, but one of the most positive outcomes is its green usage. However electric vehicles need many specific things to this day which are very important to smooth usage of electric vehicles. Electric vehicles as we know them to this day have more problems than gas-powered vehicles. The reliability of electric vehicles is not at the point when people can just throw away gas and start to be green. Electric vehicles have over 80 % more problems than regular gas-powered vehicles that we use today. With all of that electric vehicles need chargers that are not very easy to build and need a lot more place. Electric vehicles with all of that cannot practically make the same long routes as normal gas-powered vehicles. And with all of that they are very expensive for a normal customer that needs its car daily like many people do. At the end of thinking about electric vehicles, it is a nice thought. Electric vehicles are part of protecting Earth and humanity is coming very fast to these solutions so it’s just about time when there are more electric vehicles than gas-powered ones. Many people hate it many people love it but how will states that have culture built around gas and oil will react to this? The Middle East can be a big question with how people who are made rich from the oil trade will do to these agendas that have been in our society for some time.

Response to the rise of electric cars: Adaptation or Resistance?

It is known that the Middle East is one of the biggest producers of oil in our lives with many of them being the top ones in the world on their own. Their cities and lives are mostly powered but oil and tourism. Oil made their wealth and electric vehicles coming to their society too. Electric vehicles as something opposing gas-powered vehicles and many would see this as a threat to Middle Eastern wealth which is made by oil.

Middle East in that part of their life is very open and they are welcoming electric vehicles. Many would think that the Middle East would be the biggest opposition against this part restriction but they want electric vehicles to come into our day-to-day lives. For example, Saudi Arabia as one of the biggest producers in the world is preparing for their electric vehicle era and their post-oil era that will become a thing now or later. For example, Saudi Arabia on their own signed a contract for 5,6 billion dollars with China electric companies which are the leading voices in electric vehicle manufacturing these days. Saudi Arabia even wants to build around 50,000 charging stations for electric vehicles in the year 2025. It can be seen that Saudi Arabia is investing their money into a more stable sustainable future. People in the Middle East are even absolutely at peace with the main thing that comes with electric vehicles. That it is practically undermining the classic automotive industry and oil industry. It also undermines the thought of private car ownership and pushes you to a thing called car sharing.

On the other hand, Middle Eastern consumers are still up to this revolutionary change while trying to be one of the biggest players in this part of the future. People of the Middle East are excited about this change mainly for its futuristic shape as it is something new and shows that the Middle East wants to be a practical place of the future with their other projects. Electric cars are exactly part of this because of their vast variety of digital innovations and overall mechanical advances. What about big manufacturers that make these cars? Most of the manufacturers are up to this task to start their new electric cars in the Middle East with big potential. It is known as the biggest manufacturer in China but there are many more known automotive manufacturers already established their centers in the Middle East to sell new versions of their electric cars. The most known manufacturer brands in this region are Volkswagen, BMW, Nissan, Hyundai, and Tesla.

After all of that Middle East wants to be ready and tries to prepare for this big opportunity with all they have. As it is known Middle East has many problems with the implementation of electric vehicles in their day-to-day lives. In vast regions of deserts, it can be a little bit hard to find charging stations for their electric car due low distance from which an electric vehicle goes. That’s the main issue with electric vehicles is their infrastructure which is not yet ready but these are just minor problems that are already coming to be solved. And also with new technologies of battery, there are many ways that this part of the problem will be solved sooner or later. Another struggle that electric vehicles can have in the Middle East is its weather conditions which can limit the performance of electric vehicles but this problem is solved by manufacturers day by day by just adding more cooling systems and making better protection for strategic parts of electric vehicles. These are a few struggles that can make implementing plans for the Middle East in their intentions.

The Middle East wants to be the biggest promoter of green energy and wants to make a sustainable future for their region. The Middle East is offering tax breaks, preferential parking, and many more benefits that can make a life of people with electric vehicles a lot easier. Middle East is still pushing its agenda of being the top leader in electric vehicles. For example, even Saudi Arabia’s Ministry of Energy and Infrastructure known as MoEi announced that in 2050 wants to have at least 50 % electric cars on their roads. Dubai connected with practically the same announcement with it wanting to have 42,000 vehicles on its roads by the year 2030. To get to this goal made by these and many other governments Middle East is promoting a sustainable future for their environment and trying to push these environmental benefits into day to day-to-day lives of people

Are oil companies in trouble?

Oil companies in the Middle East region are on the other hand worried and they have good reason for it. With high gas prices, many people are just a bit more forced into thinking about electric vehicles and just leave gas-powered vehicles. That is the main thing that gets oil companies into much trouble. That is just a small problem that gets in the way of Middle Eastern oil companies because oil i one of the most needed materials in the world and it will not just go away. The oil will just be used for another thing. It can lower the earnings of oil companies because a big part of barrels will not be used for gas anymore but for another thing. But even gas will not go away due to its use in trade overseas or air transportation. Even OPEC made a statement about this new era by just saying that oil and gas are irrepressible and they are not worried about electric vehicles dominating the market. It can take a bit of money from them but not a big part of it.

How does it look then?

The Middle East is vastly known for its oil business and the riches made from it. Electric cars are part of the future and now or in some time roads will be full of them. Some hate electric cars with all their life and some love it. It looks like the people of the Middle East will be prepared to transition into mainly the electric vehicle era on the roads and even the public is accepting these new parts of their lifestyles. And how does it look with their oil business? The oil business of the Middle East looks a bit calm with this situation and they are counting on one specific thing. That is we will be always in need. The transition to electric cars can take a bit of money out of their hands but it is not so big that it would destroy the whole company or even the whole infrastructure of oil businesses in the Middle East.

 

Sources

Arab News (2023). How Saudi Arabia’s investments are driving electric vehicle adoption in the Middle East. Accessed 10.5. 2024. https://www.arabnews.com/node/2266876/business-economy.

Carpenter, J. William (2024). The Biggest Oil Producers in the Middle East. Investopedia. Accessed 29.5.2024. https://www.investopedia.com/articles/investing/101515/biggest-oil-producers-middle-east.asp.

CGTN (2024). Middle East insights: How Chinese EV makers are tapping into UAE. Accessed 11.5.2024. https://news.cgtn.com/news/2024-03-14/Middle-East-insights-How-Chinese-EV-makers-are-tapping-into-UAE-1rXF3s2BloA/p.html.

Crider, Johnna (2022). Middle Eastern Oil Producers Worried More People Will Buy EVs As A Result Of High Gas Prices. Clean Technica. Accessed 15.5.2024. https://cleantechnica.com/2022/03/17/middle-eastern-oil-producers-worried-more-people-will-buy-evs-as-a-result-of-high-oil-prices/.

Deloitte (2023). The Middle East goes electric! Accessed 11.5.2024. https://www2.deloitte.com/xe/en/pages/about-deloitte/articles/securing-the-future/the-middle-east-goes-electric.html.

Erikson, Petter (2020). Global Oil Demand and Supply. Accessed 28.5.2024. https://www.jstor.org/stable/resrep25070.5?searchText=electric+cars+middle+east&searchUri=%2Faction%2FdoBasicSearch%3FQuery%3Delectric%2Bcars%2Bmiddle%2Beast%26so%3Drel&ab_segments=0%2Fbasic_search_gsv2%2Fcontrol&refreqid=fastly-default%3A512433470a2861ceb27944545c0dc781&seq=1.

Goldberg, Rose Natalie (2023). How the Middle East is preparing for post-oil, EV era of transportation. CNBC. Accessed 11.5.2024. https://www.cnbc.com/2023/07/20/how-the-mideast-is-preparing-for-post-oil-ev-era-of-transportation.html.

Marks&Clark (2023). From Oil to Evs: The UAE and Saudi Arabia Embrace Green Mobility. Lexology. Accessed 15.5.2024. https://www.lexology.com/library/detail.aspx?g=4fc1b08f-6592-4a46-98f4-4a27050e367b.

Miller, D. Paul (2012) The Fading Arab Oil Empire. The National Interest 120, p.38-43. Accessed 15.5.2024. https://www.jstor.org/stable/42896464?searchText=electric+cars+middle+east&searchUri=%2Faction%2FdoBasicSearch%3FQuery%3Delectric%2Bcars%2Bmiddle%2Beast%26so%3Drel&ab_segments=0%2Fbasic_search_gsv2%2Fcontrol&refreqid=fastly-default%3A99cdb80900c0dfbd836690413548e989&seq=1.

Mineral Circles Bearings (2024). The Rise of EVs: A game changer in the Middle East and African Regions. Accessed 29.5.2024. https://mcb.ae/the-rise-of-evs-a-game-changer-in-the-middle-east-and-african-regions/.

Mordor Inteligence (2024). MIDDLE EAST ELECTRIC VEHICLE MARKET SIZE & SHARE ANALYSIS GROWTH TRENDS & FORECASTS (2024-2029). Accessed 28.5.2024. https://www.mordorintelligence.com/industry-reports/middle-east-and-africa-automotive-electric-vehicle-market.

Pichii, Aimee (2023). Electric vehicles have almost 80 % more problems than gas-powered ones. CBS News. Accessed 29.5.2024. https://www.cbsnews.com/news/electric-vehicles-consumer-reports-reliability-report/.

Shakil, Abdulah (2024) From Oil to Electricity: The GCC’s Path to Renewable Energy and Electric Mobility. Oil&Gas. Accessed 15.5.2024. https://www.oilandgasmiddleeast.com/news/from-oil-to-electricity-the-gccs-path-to-renewable-energy-and-electric-mobility.

Sunny, Lewis (2024). Oil Giant Saudi Arabia welcomes electric vehicles to the kingdom. MovinOn. Accessed 15.5.2024. https://www.movinonconnect.com/en/nos-actualites/oil-giant-saudi-arabia-welcomes-electric-vehicles-to-the-kingdom/.

Tolentino, Julianne (2023). Dubai to build 1000 new electric vehicle charging stations. Construction Week. Accessed 28.5.2024. https://www.constructionweekonline.com/projects-tenders/dubai-to-build-1000-new-electric-vehicle-charging-stations.

Source of the picture: https://www.linkedin.com/pulse/why-saudi-arabia-lead-middle-east-electric-cars-sales-mohamed-fawzi

 

Written by Tomáš Hutta

297