Operations & Maintenance

Globally, the petrochemical industry enters 2026 under pressure, with tight margins and persisting overcapacity. International tensions have driven up energy prices, prompting several regions to wonder if it is at all possible to align decarbonization goals and industrial competitiveness.

The answer could come from the Middle East. Having spent two decades cementing its role as a global powerhouse, the region continues to turn billion-dollar investments and low-cost feedstock into a decisive competitive advantage.

Over the past 15 years, several GCC countries have thus more than doubled output, led by Saudi Arabia at 127 percent growth and the UAE at 125 percent. This expansion is now coupled with a deliberate shift in product mix toward specialty chemicals and higher-margin derivatives such as linear low-density polyethylene and ethylene-vinyl acetate.

Whether this trend will continue depends on several factors - namely, the region’s ability to improve project delivery, accelerate AI deployment at scale and show the world how sustainability and carbon capture can make economic sense.

Trend One: State-Backed Scale Meets Industrial Discipline

Petrochemicals sit at the core of economic diversification strategies across the Gulf. National programs such as Saudi Vision 2030, Qatar National Vision 2030 and the UAE’s Operation 300bn have defined it as one of their priority industries for long-term growth.

With that status comes financial investment, but advantages go further: What sets the Middle East apart is its ability to associate financial backing with growth-oriented regulatory frameworks, infrastructure development and foreign investment vehicles. Free zones, such as KIZAD and JAFZA in the UAE, flexible joint ventures and long-term feedstock agreements reduce friction that continues to slow projects elsewhere.

The results are visible: just in the next three years, new projects are expected to add nearly 12 million tons of capacity. By themselves, two Saudi megaprojects for the National Industrialization Company Tasnee and Sipchem in Jubail Industrial City are expected to add 3.3 million mt/year, including polyethylene and specialty chemicals, by the end of the decade.

To succeed, projects of this size will need to leverage all the benefits digital technologies can bring, with an integrated design and engineering environment structured around a project twin, and information that effectively flows to procurement, construction and commissioning to avoid rework and delays.

From a technology perspective, the ambition to rapidly ramp up capacity will lead owner operators to mandate tools that can integrate with their existing O&M environment. Approaches such as Enterprise Project Performance (EPP) that enhance project controls and provide greater visibility into resources, costs and risks should also gain traction to ensure project success.

Trend Two: AI-Driven Digital Twins Move from Promise to Production

The need to strengthen project delivery will come hand-in-hand with the need to speed up technology implementation at scale, particularly AI and digital twins. By 2026, the industry is moving decisively beyond pilots toward enterprise deployment, with a clear focus on measurable value.

ADNOC’s 2025 strategy document reflects the shift. Its Managing Director and Group CEO, Dr. Sultan Al Jaber, outlines a move from AI exploration to “accelerated execution” in production environments. Programs such as Neuron 5 focus on autonomously monitoring critical equipment, with targets that include a 50 percent reduction in unplanned shutdowns and a 20 percent increase in planned maintenance intervals.

ADNOC’s path plays into a broader industry trend: pulling AI into the core of operations to deliver measurable gains in reliability, productivity and overall performance.

One of the key measures of success will be AI’s ability to address skill shortages and workforce constraints. While the Middle East does not face the same demographic aging seen in Europe, China or the United States, it faces a related challenge in capturing the experience of senior professionals and transferring that largely informal knowledge to newer generations of operators.

Digital twins combined with AI help bridge this gap. Codified operating knowledge, standardized workflows and contextualized data allow junior engineers to reach effective proficiency faster and reduce reliance on informal, person-to-person knowledge transfer.

A third high-value use case lies in environmental performance, particularly as key export markets introduce more stringent regulation, including mechanisms such as the EU’s Carbon Border Adjustment Mechanism. Methane and routine flaring are a prime example: Advanced digital twins can process thousands of real-time data streams to forecast and prevent flaring events, helping operators keep volumes within increasingly tight thresholds.

Trend Three: Sustainability Scales Through Economics and Networks

From the outside, sustainability can still look like a “nice to have” rather than a core driver for petrochemicals. For example, other regions have struggled to build a convincing business case for carbon capture, utilisation and storage.

The GCC, however, is increasingly emerging as the region most likely to break that pattern, supported by different cost structures and more favorable underlying economics. Today, around 10 percent of global CCUS capacity sits in the GCC, with major expansion plans underway. QatarEnergy’s path to capture 11 million tons of CO2 annually by 2035 offers a case in point that is not isolated: Saudi Arabia targets 44 million tons of CO₂ capture per year by 2035, while the UAE aims for 10 million tons per year by 2030.

A key differentiator lies in the region’s network effects. CCUS economics improve when capture, transport, storage, customers and regulators develop in parallel, and integrated industrial clusters and national coordination simplify this alignment. National oil companies anchor infrastructure investments, while petrochemical producers, utilities and industrial partners share scale through hub models.

International partnerships and commercial relationships are also crucial to ensure that CCUS byproducts find reliable offtake. Today, bilateral relationships between GCC players and China, South Korea and other Asian value chains support demand for lower-carbon materials. Sustainability investments thus reinforce market access and competitiveness rather than acting as standalone compliance measures.

Together, these three trends paint a common picture: 2026 could cement the GCC’s status as a global petrochemical superpower. That outcome depends on disciplined project delivery, enterprise-scale AI deployment and continued reductions in environmental footprint.

It also depends on demonstrating that lower-carbon petrochemicals can compete on economics as well as national ambitions. But, as other regions struggle with disadvantages the GCC countries do not experience, the region has every reason to press its competitive advantage.