Middle East conflict delays RE projects by up to 12 months, Rystad says delays

Developers face extended timelines as logistics and financing conditions tighten.

The Middle East conflict is delaying renewable energy deployment across active pipelines in the region by three to 12 months whilst reshaping energy supply dynamics for Asia through liquefied natural gas (LNG) and oil import exposure, according to Rystad Energy analysis.

The disruption is driven by instability in key maritime routes, including the Strait of Hormuz, which affects hydrocarbon supply to power sectors across LNG imports, oil imports, and spot gas-dependent economies.

Delays vary across countries. Saudi Arabia, the United Arab Emirates (UAE), Oman, and Türkiye face short-term delays before stronger medium-term deployment. Qatar, Kuwait, Iraq, Bahrain, and Jordan face moderate delays.

Iran, Israel, Syria, Lebanon, and Yemen face prolonged delays, the firm said in the report.

Solar photovoltaic imports into Gulf markets dropped sharply in March 2026 compared with 2025 averages.

The UAE imported 160 megawatts (MW), down from 767 MW. Saudi Arabia imported 80 MW, down from 704 MW. Oman recorded no imports, down from 77 MW.

Türkiye and Israel recorded higher imports at 248 MW and 220 MW, respectively.

Freight rates on the Asia–Mediterranean route rose from $2,826 per forty-foot equivalent unit (FEU) in February to $3,594 per FEU in early April.

China’s removal of its value added tax export rebate on 1 April added a 9% cost increase to solar module pricing.

Rising silver prices between $70 and $80 per ounce increased solar cell costs, adding pressure on engineering, procurement, and construction contracts and project financing.

Developers across the region have begun repricing contracts as war risk premiums enter logistics and financing assumptions.

Kuwait’s planned 1.6 gigawatts (GW) solar procurement faces exposure as pricing shifts filter through the auction market, where bids range between $10.5 and $20 per megawatt-hour.

Middle East solar manufacturing capacity is forecast to rise from 4.7 GW in 2025 to 35.8 GW by 2030.

Türkiye reaches 22.2 GW of domestic capacity from 2026, reducing import dependence and exposure to maritime disruption.

Oil and gas exporting Gulf states, including Saudi Arabia, the United Arab Emirates, Qatar, Kuwait and Iraq, face stronger incentives to expand renewable deployment.

The firm said this is due to Brent crude trading above $90 per barrel and LNG prices ranging between $15 and $20 per million British thermal units.

Higher fossil fuel prices increase the opportunity cost of domestic power generation using hydrocarbons.

Beyond the energy sector, the disruption also affects shipping costs, industrial supply chains, and commodity pricing across wider trade routes linked to Asia and Europe.