Wood Mackenzie: Middle East Energy Disruptions Boost Interest in Low-Carbon Hydrogen

A new analysis from Wood Mackenzie indicates that recent energy disruptions in the Middle East are driving renewed interest in low-carbon hydrogen projects. The firm notes that supply chain uncertainty and geopolitical risks are pushing governments and developers to accelerate hydrogen investments as a hedge against fossil fuel volatility. The report highlights that the region's existing hydrocarbon infrastructure and renewable energy potential could give it a cost advantage in producing green and blue hydrogen. Wood Mackenzie points out that while the Middle East has long been a major oil and gas producer, the current disruptions are reshaping how stakeholders view hydrogen's role in energy security. Projects in Saudi Arabia, the UAE, and Oman are seeing increased attention, particularly those tied to electrolysis powered by solar and wind. The analysis suggests that policy support and falling electrolyzer costs could make low-carbon hydrogen more competitive within the next decade. The report also cautions that scaling production remains a challenge, with infrastructure gaps and unclear offtake agreements still slowing progress. However, the immediate disruptions have created a window for hydrogen to gain traction as a strategic energy carrier, not just a decarbonization tool. Wood Mackenzie expects project announcements to pick up in the second half of 2026 if current conditions persist.