Oil & Gas

UAE warns Opec over AI-driven power demand

May 27, 2025, 4:57 PM

UAE energy minister Suhail Mohamed Al Mazrouei. Power demand in Abu Dhabi alone is forecast to more than triple by 2030

Energy minister sounds alarm
‘Overwhelming’ demand growth
Data centres gobble supply

The UAE is preparing for a sharp spike in domestic energy consumption as a wave of data centre construction drives up demand for power.

Energy minister Suhail Mohamed Al Mazrouei has warned Opec and its oil-producing allies of potential pressure on future global supplies.

His warning is at odds with other industry bodies, such as the Paris-based International Energy Agency, that have predicted slower than previously forecast demand growth.

Demand growth is “overwhelming, even for a country like the UAE,” Al Mazrouei said.

“Opec+ is doing its best to balance the market,” he said in a speech at the World Utilities Congress in Abu Dhabi.

“But it is not enough, only this group. We need the help of others and we need to be mindful of the demand.”

Demand is picking up, and the market is going to surprise us if we are not investing in it, he said.

Sliding oil prices have prompted reports that oil producing companies may be forced to reduce investment in future production and exploration.

That may be true of higher cost producers, for instance in the US, but national oil companies in the Gulf are sticking to their guidance around long-term capital expenditure plans. That includes Abu Dhabi and Saudi Arabia.

Opec+, the coalition of oil producers led by Saudi Arabia and Russia, had implemented a series of output cuts since 2022 to support prices.

Following a partial rollback in April, however, the group is now expected to agree on further production increases for May and June during an online ministerial meeting on Wednesday.

The UAE is preparing for a surge in electricity demand, fuelled by economic expansion, population growth and rising industrial activity.

Peak demand in Abu Dhabi alone is forecast to more than triple by 2030 to 28,000 megawatts (or 28 gigawatts), enough to power 21 million homes for a year, according to data from the Emirates Water and Electricity Company.

That projection predates the start of one of the world’s largest planned artificial intelligence infrastructure projects: a 1GW data centre cluster dubbed Stargate UAE, announced earlier this month.

Backed by Abu Dhabi’s G42, and in partnership with OpenAI, Oracle and Nvidia, the first phase of the campus is slated to come online next year, featuring a 200MW data centre.

By comparison, a single gigawatt facility consumes as much electricity as 750,000 US homes.

“The demand [for energy] is growing and growing very strongly, with more power required for data centres,” Al Mazrouei said.