The Middle East’s largest oil producers are ramping up investments worth billions of dollars to expand or sustain their production capacities. The efforts of Iraq, Kuwait, Saudi Arabia and the UAE reflect a deliberate push to grow market share and geopolitical influence amid evolving global energy dynamics.
While breakeven prices, domestic fiscal pressures and OPEC+ constraints limit the pace of expansion, the region’s low-cost reserves and long-term strategic planning offer a competitive edge. With oil prices stabilising recently, these producers are positioning themselves for a more assertive role in the global supply chain.
Iraq
Iraq's Ministry of Oil has stated a target of increasing oil production to 6m b/d by 2028. Achieving this goal would require an investment of more than $50b to modernise the country's oilfields. Baghdad’s development plans include the expansion of the West Qurna, Majnoon and Kirkuk oilfields along with the Gas Growth Integrated Project (GGIP).
The development of West Qurna oilfields is key to reaching its target of adding more than 2m b/d in three years. The West Qurna 1 project foresees an increase of 200,000b/d by the end of 2025 and more than 300,000b/d by 2028. State-owned PetroChina, Iraq’s Basra Oil Company, Japan’s Itochu and Indonesia’s Pertamina are key partners after ExxonMobil sold its stake in 2024. Baghdad has viewed US oil majors’ direct agreements with the Kurdistan Regional Government (KRG) as illegal, which led to ExxonMobil’s withdrawal. According to the Middle East Economic Survey, the increase to 750,000b/d is to be achieved by adding two new 100,000b/d oil-gas separation stations, with the partners targeting 800,000b/d by the end of 2028.
West Qurna 2, which is operated by Russia’s Lukoil, is on course to reach a capacity of 800,000b/d from around 500,000b/d. This includes developing the Yamama formation, with the addition of new multi-well pads. New export pipelines, water supply lines and increased storage capacity will facilitate the project.
Basra Oil Company is pursuing an increase of 200,000b/d at the Majnoon oilfield by mid-2026. Iraq Drilling Company is drilling 40 new wells and KBR is providing engineering, procurement and construction management (EPCM) services after a contract renewal. North Oil Company is cooperating with BP to boost production from four oil and gas fields in the Kirkuk region. However, it is a long-term project with no concrete completion date.
Central to Iraq’s oil and gas development strategy is the multibillion-dollar, multifaceted GGIP project, which includes the redevelopment of the Ratawi oilfield but is also linked to the building of a large-scale Common Seawater Supply Project (CSSP). It also incorporates recovering flared gas from several oilfields in southern Iraq. Basra Oil Company is cooperating with TotalEnergies, state-owned QatarEnergy, South Korea’s Hyundai Engineering and Construction, Turkey’s ENKA Construction and China’s CPECC to complete the whole project.
The first phase of the Ratawi redevelopment is aimed at boosting output to 120,000b/d by early 2026, while its second phase will result in increasing production to 210,000b/d in 2028. The project to process associated gas from the field could start in early 2026.
In April 2025, output started at the Faihaa oilfield with the construction of a 100,000b/d processing facility. China’s United Energy is the operator and is targetting 130,000b/d of oil. Lukoil and Japan’s INPEX are working on the Eridu Field with 30,000b/d of oil by 2027, which could peak at 250,000b/d. Chevron is working on the Nassiriyah project on the basis of an agreement with Iraq to boost production to 200,000b/d in phase 1 and 600,000b/d later, as the project is in its early stages.
In addition to OPEC+ policies, Iraq also faces several challenges. It is heavily dependent on oil revenue, and a budget constraint could lead to delays in different projects. Disputes with the Kurdistan Regional Government (KRG) could also hinder progress. Thus, fiscal and political stability is of utmost importance for different projects targeted at increasing output capacity. Any domestic political spat could drive more international partners out of the country.
FIG.1: MIDDLE EAST PRODUCTION
| Country | Overall investment/budget | Timeframe | Current capacity/output | Target capacity/output | Target date |
| 2028 | |||||
| 5m b/d | 2027 |
Kuwait
Iraq’s neighbour, Kuwait, had reached an oil production capacity of 3.2m b/d as of September, according to its oil minister, Tariq al-Roumi. However, it intends to boost this figure to 4m b/d by 2030 or later. It is backed by investments of $50b through 2020, with more than $9b annually over the next five years. It is focusing its efforts on mature field optimisation, heavy oil recovery, water injection for pressure support and offshore exploration.
Burgan is Kuwait’s largest mature field. The country is concentrating on the phased redevelopment of the field with new technologies to sustain production. Kuwait Oil Company (KOC) and its partners are focused on integrating enhanced oil recovery (EOR), pressure maintenance and infrastructure upgrades to extend field life and improve recovery. Around $2.1b has been set aside for drilling, facilities and water/gas injection. Bids have been ongoing in recent months, with recent services to China National Logging Corporation for five-year oilfield support. By 2030, these efforts are likely to lead to a target of 4m b/d. According to the IEA, Kuwait’s efforts to limit declines at the 80-year-old field have so far proven “challenging”.
Bids were expected to close this September on the Separation Gathering Centre 1 (SGC 1) in North Kuwait and the Water Injection Plant 1 (WIP 1) in eastern Kuwait, with estimated costs of $1b. The project is aimed at maintaining production and dealing with surplus water. SGC 1 will have a total liquid-handling capacity of 600,000b/d, while WIP 1 will have an injection capacity of 750,000b/d.
At KOC’s Gathering Centre 25 (GC-25), a new separation facility is being built, and a water injection facility constructed at GC-30. Both projects are being pursued to increase sustainable crude oil output in the northern oilfields. They also include a centralised lab at GC-25 and a new water injection network at GC-31.
The FEED phase is underway at Kuwait’s South Ratqa heavy oil project to sustain production at around 95,000 b/d, which is being processed at the Al-Zour refinery. In the Neutral Zone, the new discovery of North Wafra Oil is also being considered for production by 2028. Similarly, the Nokhetha and Julaia Fields are also in the exploration and appraisal phase, with output likely to start in 2027–28.
In addition to OPEC production constraints, Kuwait is also facing other challenges, such as the extraction of heavy oil, ageing infrastructure, and technological and skills gaps. But with the help of recent investment, it is likely to achieve 4m b/d of oil by 2030 despite the ambitiousness of the target.
Saudi Arabia
Saudi Arabia, through Saudi Aramco, is focused on keeping its maximum sustainable crude oil production capacity (MSC) at 12m b/d, following a January 2024 government directive to halt expansions beyond this level (previously targeted at 13m b/d by 2027).
Key projects underway in the Kingdom are offshore crude oil ‘increments’ at mature fields, supported by a $50–60b annual capex programme, including $90b across 99 projects for upstream upgrades. These include engineering, procurement and construction (EPC) contracts worth more than $50b, with partners such as ExxonMobil and China’s state-controlled Sinopec involved in related developments.
Some gas projects, such as Jafurah, indirectly support oil by reducing the use of oil for power generation (offsetting around 35,000b/d from late 2025), the focus remains on boosting crude oil output. Aramco is also investing in technology to boost efficiency and reduce the carbon intensity of its operations. This includes using AI and other digital tools to optimise drilling and production, as well as projects such as a large-scale subsea transmission network and CCS hubs. One CCS facility in Jubail is aiming to store up to 9mt/yr of CO₂ by 2027.
The main part of the Saudi capacity increase will come from the expansion of the Marjan and Berri offshore fields. Marjan could add 300,000b/d of crude capacity by the end of this year, while the Berri expansion is designed to add 250,000b/d by 2027. The expansion of the Safaniyah offshore oilfield should boost production by 400,000b/d by 2027. In the same year, Aramco intends to achieve production of 300,000b/d of oil and gas from the Tanajib oilfield development.
Aramco’s Zuluf offshore field has encountered some delays but is expected to add 600,000b/d of Arab Heavy crude. It is a complex, long-cycle project and its original completion date was around 2022. Aramco had to re-offer some offshore contracts due to the contractor's inability to provide the required performance bank guarantees to Aramco.
Aramco is also working to optimise onshore production with the help of EOR programmes at key fields such as Ghawar, Haradh, Khurais and Shaybah. This includes water and CO₂ injection to arrest decline and lift sustainable capacity, with the focus on near-term gains.
All the above-mentioned projects can offset decline at key Saudi oilfields to sustain the country’s capacity goal. The Saudi government is banking on Aramco to pay larger dividends to fund its massive Vision 2030 project. Its directive to maintain its MSC at 12m b/d instead of its previous 13m b/d is likely to free up billions of dollars in capex for Aramco for other investments or increased dividends to the state, but the company still needs to keep capacity at 12m b/d. The company is boosting investment in gas production to replace oil with gas for domestic use, with the aim of freeing up 3m b/d of oil for export. This will bring more oil revenue, which can be spent on sustaining present capacity.
UAE
The UAE has been boosting its oil production capacity thanks to a $150b investment plan through 2027. Led by state-owned ADNOC, the country has reportedly reached a capacity of 4.85m b/d and has a target of 5m b/d by 2027. It has benefited the most from OPEC+’s policy of production adjustments by receiving a 300,000b/d quota rise in addition to its share of the coordinated production increases.
One of the key projects is the expansion of the Upper Zakum Oilfield, where ADNOC is cooperating with ExxonMobil and INPEX/JODCO. This will help increase its output to 1m b/d from 750,000b/d now. The project includes new artificial islands, drilling platforms and subsea tiebacks. Its full integration to support the 2027 production target is expected by 2027.
ADNOC is cooperating with superindie Occidental Petroleum to increase the capacity of the Shah Gas Field to 1.85bcf /d from 1.45bcf/d. In addition to gas, the project will also yield condensates. Similarly, the Hail and Ghasha offshore developments underway at present will lead to 1.5bcf/d of gas and some associated condensates. These developments involve ADNOC’s cooperation with Italy’s Eni, Lukoil and Thailand’s PTTEP.
ADNOC is also working on unconventional oil and gas developments in the UAE, assisted by the US company EOG Resources. Most of the work is in the Al Dhafra region and remains in the exploration phase. If successful, production could start as early as 2027. Drilling started in the second half of 2025 with an expected three-year appraisal phase.
The UAE is also positioning itself as the world’s key low-cost, low-carbon producer of hydrocarbons. ADNOC is accelerating its decarbonisation strategy, focusing on CCS and other low-carbon solutions to reduce the carbon footprint of its operations. This could give the company a competitive advantage in a transitioning global market.
Geology and power
The investments being made in Iraq, Kuwait, Saudi Arabia and the UAE are ultimately a bid to turn geological advantage into sustained geopolitical power. They acknowledge the IEA’s observation that roughly 90% of upstream investment is needed just to offset natural field decline, but their goal is to secure more than just maintenance.
The sheer scale of their collective spare capacity ensures their ability to stabilise the global market. Facing an uncertain energy future, these four producers have collectively doubled down on their core strength, confirming their intent to shape the global supply chain and wield decisive influence over international economic and political affairs for decades to come.
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