Climate change may change the face of trade routes across GCC
There are numerous scenarios for how climate change might affect the world. However, it is becoming clear that barring significant changes in climate policies, the world could continue to heat up.
Sea levels could continue to rise. Weather patterns could change in many areas. The jet stream, and other important wind currents could change. Tidal and other ocean patterns could change. Given the abject failures of global climate meetings and many countries’ climate initiatives, temperatures may in fact rise by 3C or more by 2090.
War in Ukraine, sanctions on Russia, and other energy and inflation shocks have set back climate change policies. The big race to plug gaps in oil and gas supply overshadows the race to contain climate change. Energy security has taken over environmental and climate security as the main goal for many governments around the world. It may take a long time for climate issues to gain more prominence in policy discussions.
Predicting climate and environmental change is more complicated than predicting the weather. And climate and environmental changes make predicting the weather more uncertain over longer periods of time. However, those in charge of chokepoints, such as ports as well as shipping and sea lanes in the region need to plan anyway.
Another set of changes that must be considered include planned energy transitions. Many countries in the region already have plans to develop these energy moves. Saudi Arabia and the UAE stand out with their green initiatives.
As climate change heads toward its presently seemingly inevitable path toward 3C-plus higher, Arctic routes will become more economic as the ice melts away.
Dr. Paul Sullivan
One might expect the importance of oil and gas in the world to diminish. Peak oil and peak gas will be caused more by demand peaking than by supply hitting a peak. There will be a change toward electric vehicles and even electric ships and aircraft. Ships may shift more toward liquefied natural gas, hydrogen, or other fuels and away from the usual heavy oils used in recent years. They and other forms of transport could change to fuel and energy sources we do not even know about yet. There could be a significant revolution in shipping technologies that happens as energy transitions, the climate changes, and other moves occur.
There is likely to be more trade and shipping of minerals, metals, equipment, and technologies for renewables, nuclear, and other forms of green energy — and less trade and shipping of oil, gas, and coal. Ships and shipping need to change with this. Shipping routes need to change. Ports will need to plan for different types of storage, docking, offloading, and local and regional transportation connections for these new materials.
This will surely increase the demand for logistics and supply chain change experts, for those thinking about job opportunities in all of this.
Shipping routes could also shift. As climate change heads toward its presently seemingly inevitable path toward 3C-plus higher, Arctic routes will become more economic as the ice melts away. However, safety, security, navigation, and other infrastructure need to be built up along the Arctic. Long stretches of these routes completely lack this infrastructure. For these routes to be workable much groundwork is needed.
If Suez is challenged by new Arctic routes then the Bab El Mandab strait, along the Arabian Peninsula, will also be challenged as would ports along the Red Sea. Hormuz could be challenged by the relative decline in trade along the Suez Canal and an expected decline in oil and LNG trade over the coming decades. Ports all along the southern and eastern parts of the Arabian Peninsula may find many new competitive challenges. There is a chance that oil and gas could be replaced by hydrogen and ammonia of all colors, but that would also be determined by how competition develops between the region and other parts of the world.
One thing is certain — change is on the way. And Gulf Cooperation Council states need to be prepared.
• Dr. Paul Sullivan is a senior research associate at KFCRIS and non-resident fellow, Global Energy Center, Atlantic Council.