{"id":109092,"date":"2025-11-04T00:00:00","date_gmt":"2025-11-04T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/uae\/this-morning-more-energy-investments-needed-to-keep-up-with-demand-data-center-buildout-al-jaber-says\/"},"modified":"2025-11-04T00:00:00","modified_gmt":"2025-11-04T00:00:00","slug":"this-morning-more-energy-investments-needed-to-keep-up-with-demand-data-center-buildout-al-jaber-says","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/uae\/2025\/11\/04\/this-morning-more-energy-investments-needed-to-keep-up-with-demand-data-center-buildout-al-jaber-says\/","title":{"rendered":"THIS MORNING: More energy investments needed to keep up with demand + data center buildout, Al Jaber says"},"content":{"rendered":"

Good morning, lovely people. <\/strong>Exactly as expected, the theme of the day is oil and gas \u2014 with a bit of technology thrown in the mix as the nexus between the two gets more attention than ever before at this year\u2019s Adipec in Abu Dhabi. <\/p>\n

The big story of the day:<\/strong> Microsoft\u2019s USD 15.2 bn investment in the UAE until 2029, which will be split between capex on data center infrastructure and imports of chips to the UAE. <\/p>\n

Plus: Adnoc\u2019s XRG is set to acquire a stake of Azerbaijan\u2019s Southern Gas Corridor.<\/strong> Also:<\/strong> The Abu Dhabi Investment Authority joined other anchor investors backing Indian digital stockbroker Groww\u2019s IPO. <\/p>\n

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<\/a> The general themes of day one of Adipec? More energy, more demand, and the growing nexus between energy and technology. <\/strong>Long-term demand for oil is as healthy as ever, Adnoc\u2019s CEO Sultan Al Jaber said in his opening speech (watch, runtime: 47:03<\/a>), with oil consumption expected to remain above 100 mn bbl \/ d beyond 2040. Renewable energy capacity is expected to double, while LNG demand is projected to rise by 50%, fueled by a 4x surge in data center power demand, a growing global aviation fleet, and a 30% increase in jet fuel consumption.<\/p>\n

More than USD 4 tn will be required annually<\/strong> to fund transmission infrastructure, data-center build-out, and supply across all energy sources<\/strong>, Al Jaber said, flagging accelerated electricity demand through 2040, driven in part by data-center energy needs, and arguing that a shortage of gas turbines is pushing power prices higher. <\/p>\n

The same sentiment was echoed by <\/strong>Energy Minister Suhail Al Mazrouei, who said demand is showing <\/strong>no signs of a slowdown into 2026<\/strong>, and that investments are needed to keep pace to avoid supply shortfalls, Global markets still require more energy, and without a price environment that supports upstream spending, producers will struggle to deliver supply, he added.<\/p>\n

The energy addition, rather than elimination, narrative remained prevalent<\/strong>, with renewables and climate targets getting less and less attention with every edition of Adipec in recent years. <\/p>\n

IN CONTEXT-<\/strong> The statements come amid general speculation of potential oversupply as Opec+ delivered production hikes, with the International Energy Agency trimming<\/a> its forecast for world oil demand growth this year to some 700k bbl \/ d. It also expected consumption to stay muted through 2025 and 2026, with annual growth averaging around 700k bbl \/ d. Opec, on the other hand, has kept its global oil demand growth forecast unchanged at 1.4 mn bbl \/ d for 2026 \u2014 almost double the IEA\u2019s.<\/p>\n

As it happens, <\/strong>Morgan Stanl<\/strong>ey is also turning more bullish on crude after Opec+\u2019s <\/strong>decision<\/a><\/strong> to pause hikes in 1Q 2026<\/strong>, bumping its Brent forecast for 1H 2026 to USD 60\/bbl from USD 57.50, arguing that the group\u2019s move helps stabilize the market outlook even if it does not materially alter supply expectations, Bloomberg<\/a> reports, citing a note from the bank. <\/p>\n

The quota system and reality on the ground are diverging:<\/strong> Morgan Stanley estimates Opec+ output only rose around 500k bbl \/ d between March and October, well below the 2.6 mn bbl \/ d quota increase announced for that period. <\/p>\n

The <\/strong>UAE<\/strong> is among several compensating for overproduction<\/strong>, with the country recently revising its plan to offset barrels produced above its Opec+ quota, committing to a stepped series of make-up cuts from October 2025 through June 2026, according to a statement<\/a>. Abu Dhabi will start with 10k bbl \/ d in October, November, and December, then lift reductions to 20k bbl \/ d in January and 30k bbl \/ d in February. Cuts accelerate further to 50k bbl \/ d in March and April, before reaching 55k bbl \/ d in both May and June.<\/p>\n

The plan closely matches the previously communicated <\/strong>10-month roadmap<\/a><\/strong> from September 2025 to June 2026, though the reductions are reduced by around 10 mn bbl \/ d to 270k bbl \/ d, down from 282k bbl \/ d previously. <\/p>\n

Supporting the view:<\/strong> Opec+\u2019s latest signal is giving the market some confidence that producers remain focused on managing supply through a softer demand season, reinforcing expectations of a steady path toward balance, Vijay Valecha, CIO of Century Financial said in a note seen by EnterpriseAM. <\/p>\n

The outlook is further buoyed by geopolitical tensions<\/strong>, following reports of a Ukrainian drone strike on a Russian Black Sea oil port that raised concerns over potential supply disruptions, Valecha said.<\/p>\n

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WEATHER- <\/strong>Dubai will see a high of 34\u00b0C today, along with an overnight low of 24\u00b0C, while Abu Dhabi could see a high of 34\u00b0C and a low of 23\u00b0C, according to our favorite weather app. <\/p>\n

WATCH THIS SPACE- <\/p>\n

<\/a> #1- <\/strong>Abu <\/strong>Dhabi\u2019s Upper Zakum field is on track to hit its production expansion milestone<\/strong> ahead of time<\/strong>, ExxonMobil\u2019s CEO Darren Woods was quoted as saying at Adipec by Bloomberg<\/a>. The offshore field, operated in partnership with Adnoc and Japan\u2019s Inpex, currently produces some 1 mn bbl \/ d. The ongoing expansion aims to lift output to 1.5 mn bbl \/ d by 2030, with Woods signaling that the ramp-up could be achieved earlier than scheduled. <\/p>\n

REMEMBER-<\/strong> ExxonMobil and Inpex announced<\/a> plans to expand the capacity of Upper Zakum back in May. Adnoc, ExxonMobil, and Inpex were looking to upgrade the field\u2019s infrastructure to feature AI-enabled remote operations, link the field to the UAE\u2019s clean energy grid, and integrate artificial islands for drilling activities.<\/p>\n

DATA POINT-<\/strong> Adnoc is targeting a capacity boost to 5 mn bbl \/ d by 2027, up from roughly 4.85 mn bbl \/ d today.<\/p>\n

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<\/a> #2- <\/strong>Fore<\/strong> \u2014 costs are soaring across Dubai\u2019s fairways:<\/strong> The fees to play a round of golf in Dubai have climbed nearly 46% this year, after rising by a third in 2024, Arabian Gulf Business Insight<\/a> reports, citing data from Golfscape. A round at Trump International Golf Club Dubai\u2019s championship course will cost around AED 3.5k in November, Dubai Golf CEO Chris May told the outlet.<\/p>\n

What\u2019s driving the rise? <\/strong>Although prices are surging worldwide, May attributed Dubai\u2019s price jump to a mismatch in local supply and demand \u2014 with the emirate seeing a short golf course supply relative to the number of active golfers in the city. He also cited rising operational costs like irrigation \u2014 which can cost up to AED 5 mn per 18-hole course a year \u2014 machinery, fertilizers, and equipment as primary drivers of higher green fees.<\/p>\n

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#3- <\/strong>UAE<\/strong>moves closer to the far side of the moon: <\/strong>The Mohammed Bin Rashid Space Center (MBRSC) confirmed it has completed development of the Rashid 2 Rover in the UAE following full environmental and functional tests, according to the Dubai Media Office<\/a>. The spacecraft is now being shipped to the US to begin joint launch integration with US-based aerospace firm Firefly Aerospace ahead of its planned 2026 landing attempt on the Moon\u2019s far side.<\/p>\n

REMEMBER-<\/strong>MBRSC inked an agreement back in May<\/a> with Firefly Aerospace for the American firm to provide the lunar lander needed for MBRSC\u2019s Rashid 2 Rover to be deployed on the Emirates Lunar Mission to the moon. <\/p>\n

HAPPENING TODAY- <\/p>\n

#1- The world\u2019s biggest oil and gas forum, <\/strong>Adipec<\/a><\/strong>, kicked off yesterday<\/strong> and runs until<\/strong> Thursday <\/strong>at the Abu Dhabi National Exhibition Center. The energy mega-event brings together global oil and gas, hydrogen, clean tech, and industrial strategy players alongside ministers and climate negotiators, to discuss building a resilient energy sector and developing intelligent solutions. <\/p>\n

#2-- <\/strong>Arabal International Aluminum Conference<\/a><\/strong> also runs u<\/strong>ntil Thursday <\/strong>at the Dubai Exhibition Center. The event gathers regional producers, OEMs, and technology players to discuss industrial decarbonization, supply chain competitiveness, and global metal demand cycles.<\/p>\n

#3- <\/strong>Gulfood Manufacturing<\/a><\/strong> is also running from today until Thursday <\/strong>at Dubai World Trade Center. The F&B manufacturing event will bring processing, supply, logistics, packaging, and automation players together for exhibitions showcasing the latest developments in the sector.<\/p>\n

#4- <\/strong>Dubai Design Week<\/a><\/strong> kicks off today and runs through Saturday <\/strong>at Dubai Design District. Designers, studios, universities, brands, and collectors will meet for workshops, exhibitions, a marketplace, and talks, to showcase innovation, materiality, and future-forward design. <\/p>\n

#5- <\/strong>The <\/strong>UAE Government Annual Meetings kick off today and run through<\/strong> Thursday, 6 November in Abu Dhabi.<\/strong> The series of meetings will bring together more than 500 senior officials and government leaders for three days of policy coordination, national briefings, and strategic priority alignment. On the agenda: the economy, investment, AI, healthcare, and traffic congestion.<\/p>\n

HAPPENING THIS WEEK- <\/p>\n

US Treasury Department's top sanctions official John Hurley arrives<\/strong> in the region on Friday<\/strong>, with a plan to visit Israel, the UAE, Turkey, and Lebanon, Reuters<\/a> reports, citing a statement seen by them. The visit marks his first to the region since taking office, and will discuss pressure against Iran, with his UAE leg also focusing on combating money laundering and the financing of terrorism. <\/p>\n

THE BIG STORY ABROAD-<\/p>\n

OpenAI\u2019s endless thirst for computing power is dominating headlines this morning.<\/strong> The ChatGPT maker signed a USD 38 bn agreement with cloud arm Amazon Web Services to gain access to its Nvidia GPUs for the next seven years. The processing power \u2014 which will be immediately available to OpenAI \u2014 will help ChatGPT respond to user prompts and train newer models, with plans to expand capacity in the next few years.<\/p>\n

A vote of confidence: <\/strong>Amazon\u2019s share price jumped 4% to close at USD 254 yesterday \u2014 an all-time high and a sign of relief for investors who worried Amazon was falling behind the AI race. Chipmaker Nvidia also gained some 4.4%, landing just below USD 209. (Bloomberg<\/a> | CNBC<\/a> | Reuters<\/a> | Financial Times<\/a>)<\/p>\n

ALSO- New York is set for a showdown: <\/strong>The state\u2019s general election will see Democratic nominee \u2014 and front-runner with a double-digit lead in the polls \u2014 Zohran Mamdani go up against former governor Andrew Cuomo, who landed a late endorsement from Donald Trump. The president lashed out against \u201cCommunist\u201d Mamdani and vowed to cut federal assistance to New York under the young progressive candidate. The race \u2014 one of the most politically charged in the US in a while \u2014 is already seeing unprecedented voter turnout. (New York Times<\/a> | Fox<\/a> | Axios<\/a> | Semafor<\/a>)<\/p>\n

AND- A scandal is rocking Israel<\/strong>: Top military lawyer Yifat Tomer-Yerushalmi is now behind bars facing accusations of breach of trust and obstruction of justice. Tomer-Yerushalmi admitted last week to leaking a controversial surveillance video last year that showed Israeli soldiers severely abusing a Palestinian inmate at the notorious Sde Teiman camp. The prosecutor then disappeared for a few hours on Sunday night leaving behind a cryptic note and her car, sparking uproar, speculation and a nationwide search campaign that retrieved her safely. Prime Minister Netanyahu earlier called the leak \u201cthe most severe diplomatic attack Israel has faced.\u201d (Associated Press<\/a> | Financial Times<\/a> | Bloomberg<\/a>)<\/p>\n

ALSO WORTH NOTING THIS MORNING-<\/strong><\/p>\n