Major Upstream Oil & Gas Projects in the Middle East to Watch in 2026

There’s a strange contradiction sitting at the heart of the Middle East’s energy sector right now. On one hand, some of the biggest upstream engineering programs in the region’s history are moving forward — new gas fields coming online, offshore mega-projects breaking ground, capital plans measured in the tens of billions. On the other, the Strait of Hormuz has been effectively closed to routine commercial shipping since February 28, 2026, after the US and Israel struck Iran, and it’s still not back to normal as of mid-August — tanker traffic running at a fraction of pre-crisis levels, convoys moving under naval escort.

So you’ve got two things happening at once: massive investment in production capacity, and massive uncertainty about how that oil and gas actually gets to market. Saudi Arabia, the UAE, and Qatar — the region’s “Big Three” — along with Iraq and Oman, are pressing ahead regardless. Here’s where the money and the engineering are actually going in 2026.

1. Saudi Aramco’s Gas Push and the Jafurah Bet

Aramco has set 2026 capital investment guidance at $50 billion to $55 billion, roughly in line with the $52.2 billion it spent in 2025. A big chunk of that is aimed at gas — not because crude has stopped mattering, but because every barrel of oil freed up domestically by switching power generation and industry over to gas is a barrel available for export instead.

The centerpiece of that strategy is Jafurah, the largest unconventional gas resource in the Middle East. Aramco actually started gas production there in December 2025, and by early 2026 the field had hit a meaningful production milestone. This year’s focus is on expanding the Tanajib gas processing plant and adding more compression capacity across the kingdom, working toward a target of 2 billion standard cubic feet a day of sales gas by 2030 — with 2026 marking the completion of phase two.

2. Qatar’s North Field Expansion

Qatar is already the world’s biggest LNG exporter, and the North Field Expansion is designed to stretch that lead even further — lifting capacity from 77 million tonnes a year to 126 million tonnes by 2027 through the North Field East and North Field South projects, six new mega-trains at 8 million tonnes apiece.

It hasn’t gone entirely to plan. Construction on parts of the expansion was paused after the Iran conflict broke out in late February, and timelines have slipped as a result. Work is continuing regardless, with QatarEnergy leaning on remote engineering hubs to keep things moving even where physical access has gotten harder.

3. ADNOC’s Scale-First Strategy

The UAE’s ADNOC approved a $150 billion, five-year capital plan running through 2030, with a chunk of it aimed squarely at hitting 5 million barrels a day of production capacity by 2027 — a target that’s become more achievable now that the UAE has exited OPEC and isn’t constrained by a group quota anymore.

The flagship project here is Hail and Ghasha, one of the largest offshore sour gas developments in the world, now run through a newly created entity called ADNOC Ghasha. The project is being built to run at net-zero emissions using carbon capture, with the company targeting roughly 1.5 million tonnes of CO₂ captured and stored annually. A final investment decision on phases two and three — expected to add around 30% more gas processing capacity — is anticipated in the first quarter of 2026.

4. Iraq: The Lone New Oil Story

While most of the region is focused on gas and brownfield expansion, Iraq is currently the outlier — one of the only countries in the Middle East pushing forward large-scale new oil development. East Baghdad, operated by China’s EBS, is the bright spot in Iraq’s 2026 production outlook, with an expected addition of around 46,500 barrels a day by mid-year and a longer-term target of 120,000 barrels a day by 2027.

That growth comes with a catch. Iraq’s had to cut current production down to about 1.2 million barrels a day because of disruptions at its southern export ports — so the country is essentially trying to build new capacity while managing a forced reduction elsewhere at the same time.

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5. Oman’s Bet on the Indian Ocean

Oman’s position outside the Strait of Hormuz has turned into a genuine strategic advantage this year. In February 2026, the country issued a request for proposals for a roughly 400-kilometer, 48-inch pipeline connecting its national grid to the Ras Markaz terminal on the Indian Ocean — effectively building an alternative export route that bypasses Hormuz entirely.

On the upstream side, OQ Exploration & Production is putting somewhere between $800 million and $900 million into development this year, aiming to push output up to 300,000 barrels of oil equivalent a day.

6. Kuwait Goes Offshore

Kuwait’s oil history has always been an onshore story Burgan being the obvious example. That’s starting to change. In the first half of 2026, Kuwait Petroleum Corporation opened the door to international oil companies to help develop the country’s first major offshore discoveries, a genuinely new chapter for a producer that’s rarely looked to the water.

The near-term plan includes drilling nine additional exploratory wells, alongside heavy investment in managed pressure drilling technology needed to handle the high-pressure, high-temperature conditions found offshore in Kuwaiti waters.

7. Iran: South Pars Under Sanctions Pressure

Iran’s national oil company continues working to optimize output from South Pars, the shared field that holds the world’s largest recoverable natural gas reserves (Qatar develops the other side of it as the North Field). Given the sanctions environment and the ongoing conflict, Iran is leaning heavily on domestic engineering capability and regional partnerships rather than foreign investment, focused on improved recovery methods, upgraded compression, and redeveloping older phases to offset natural decline.

Where This Leaves the Region Heading Into the Rest of 2026

Technically, these are some of the most advanced upstream projects the region has ever attempted — AI-driven reservoir modeling, 3D seismic imaging, large-scale carbon capture. But the thing actually worth watching isn’t the engineering. It’s geopolitical resilience.

The shift toward gas in Saudi Arabia and Qatar, and toward Indian Ocean export routes in Oman, tells you something important: producers aren’t just chasing throughput anymore. They’re building in optionality, so that if the Strait of Hormuz stays disrupted — or gets worse — they still have a way to get product to market.

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FAQ

Is the Strait of Hormuz still closed?

Effectively, yes, as of mid-August 2026. Iran closed it to foreign shipping after the February 28 US-Israeli strikes, and while there was a brief reopening under a US-Iran agreement in June, that broke down within weeks after attacks on commercial vessels. Traffic is running at a small fraction of pre-crisis levels, with convoys moving under naval escort. Given how fluid the situation is, check a live source before relying on this for planning.

Why is Saudi Arabia investing so heavily in gas instead of oil?

Partly economics, partly strategy. Every barrel of crude that gets replaced domestically by gas — for power generation, petrochemicals, industrial use — is a barrel Aramco can export instead. Jafurah, the kingdom’s giant unconventional gas play, is central to that plan.

How is Qatar’s North Field Expansion affected by the regional conflict?

Construction was paused on parts of the project after the Iran war began, and completion timelines have slipped. Work hasn’t stopped, though — QatarEnergy has shifted more toward remote engineering to keep the North Field East and North Field South projects moving.

Why is Oman building a new pipeline to the Indian Ocean?

Oman doesn’t have to route its exports through the Strait of Hormuz the way most Gulf producers do, and the 400-kilometer pipeline to Ras Markaz is designed to capitalize on that. It gives regional producers an alternative path to market that avoids Hormuz entirely — increasingly valuable given how unreliable that route has become in 2026.

Is Iraq’s oil production actually growing this year?

It’s mixed. New fields like East Baghdad are adding volume, but Iraq has also had to cut overall production because of disruptions at its southern export ports. So the country’s growing new capacity and managing a forced cutback at the same time.

What’s driving ADNOC’s push to 5 million barrels a day by 2027?

Mainly the UAE’s exit from OPEC, which removed the group production quota that had constrained ADNOC’s output. That, combined with a $150 billion five-year capital plan already in motion, is what’s making the 2027 target realistic rather than aspirational.