As we go deeper into the second half of 2025, global energy markets continue to contend with a fundamental mismatch: accelerating supply growth amid structurally weak demand. For energy financiers, this disconnect poses a growing challenge.
The role of banks must evolve − moving beyond short-term supply optimism towards long-term capital discipline, strategic selectivity and a greater focus on transition readiness.
The recent expansion in oil output − driven both by Opec+ production increases and the US’s assertive Triple-3 economic strategy − is real and material. Unlike previous symbolic adjustments, we are now witnessing the addition of fresh barrels into a market that is already under pressure.
Demand growth on the other hand remains underwhelming.
Economies in Europe continue to contract, while China is structurally rebalancing its output away from heavy industry. The traditional engine of Asia-Pacific growth has also sputtering.
These are not cyclical signals. They are long-term indicators of a more efficiency-driven and lower-consumption future.
This evolving reality is already reflected in the market behaviour. The forward curve of oil has shifted into deeper contango – a situation where price of a commodity futures contract is higher than the spot price of the underlying commodity – which is a clear signal that market participants expect supply to continue outpacing demand.
This presents serious implications for investment planning.
In high-cost regions, profitability is being squeezed. Volatility in the bond market – exacerbated by widening US fiscal deficits – has raised borrowing costs and introduced a new layer of caution in capital flows. Meanwhile, geopolitical uncertainties continue to shape supply strategies and contribute to internal tension in key producing alliances such as Opec+.
For financial institutions, this context calls for a more calibrated approach.
Energy security remains important, but blanket support for production-led growth – particularly in already saturated segments – risks overextending capital and misallocating resources.
The focus now must shift to smarter financing models that reflect where energy markets are going, not just where they have been. That includes working with industrial clients transitioning to lower-emission operations, and promoting green and sustainability-linked structures that balance performance, transparency and climate alignment.
A recent example from the UAE steel sector illustrates this shift in action: a major green financing package was extended to support the country’s largest private-sector low-emission steel producer.
This type of transaction shows how financial institutions can prioritise long-term efficiency and clean industrial growth, even as short-term market signals remain volatile.
More broadly, a clear commitment to sustainable finance – guided by national targets and institutional pledges – is shaping how transactions are structured, risks managed and clients supported through the transition.
Even in the face of oversupply, it would be a mistake to see today’s market as a reason to pause or pull back. Rather, it is a prompt to be more selective, strategic and forward-looking in how we fund energy activity.
Regions like the Gulf remain key, both for current energy resilience and future transition leadership. Financial institutions with deep sector knowledge and an appetite for innovation-led solutions are uniquely positioned to support this dual objective.
Looking ahead, the imperative for energy financiers is not to simply chase scale or production volume. The goal is to ensure that capital is enabling projects that are viable, resilient, and adaptable to the shifting contours of global demand. That means supporting clients in making prudent investment decisions, accelerating clean technology adoption, and protecting long-term value through disciplined financial structuring.
As energy markets transition from volatility to oversupply, and from rapid expansion to structural realignment, banks must adjust as well – committing to finance the energy sector’s future responsibly and in alignment with broader sustainability goals.
Sajjad Jafri is head of energy and commodities business at Mashreq
What is graphene?
Graphene is extracted from graphite and is made up of pure carbon.
It is 200 times more resistant than steel and five times lighter than aluminum.
It conducts electricity better than any other material at room temperature.
It is thought that graphene could boost the useful life of batteries by 10 per cent.
Graphene can also detect cancer cells in the early stages of the disease.
The material was first discovered when Andre Geim and Konstantin Novoselov were 'playing' with graphite at the University of Manchester in 2004.
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
HIJRA
Starring: Lamar Faden, Khairiah Nathmy, Nawaf Al-Dhufairy
Director: Shahad Ameen
Rating: 3/5
THE BIO
BIO:
Born in RAK on December 9, 1983
Lives in Abu Dhabi with her family
She graduated from Emirates University in 2007 with a BA in architectural engineering
Her motto in life is her grandmother’s saying “That who created you will not have you get lost”
Her ambition is to spread UAE’s culture of love and acceptance through serving coffee, the country’s traditional coffee in particular.
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The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
The Bio
Name: Lynn Davison
Profession: History teacher at Al Yasmina Academy, Abu Dhabi
Children: She has one son, Casey, 28
Hometown: Pontefract, West Yorkshire in the UK
Favourite book: The Alchemist by Paulo Coelho
Favourite Author: CJ Sansom
Favourite holiday destination: Bali
Favourite food: A Sunday roast
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
Killing of Qassem Suleimani
More from Neighbourhood Watch:
More from Neighbourhood Watch:
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Marathon results
Men:
1. Titus Ekiru(KEN) 2:06:13
2. Alphonce Simbu(TAN) 2:07:50
3. Reuben Kipyego(KEN) 2:08:25
4. Abel Kirui(KEN) 2:08:46
5. Felix Kemutai(KEN) 2:10:48
Women:
1. Judith Korir(KEN) 2:22:30
2. Eunice Chumba(BHR) 2:26:01
3. Immaculate Chemutai(UGA) 2:28:30
4. Abebech Bekele(ETH) 2:29:43
5. Aleksandra Morozova(RUS) 2:33:01
Killing of Qassem Suleimani
AI traffic lights to ease congestion at seven points to Sheikh Zayed bin Sultan Street
The seven points are:
Shakhbout bin Sultan Street
Dhafeer Street
Hadbat Al Ghubainah Street (outbound)
Salama bint Butti Street
Al Dhafra Street
Rabdan Street
Umm Yifina Street exit (inbound)
UAE currency: the story behind the money in your pockets
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
THE BIO
Age: 30
Favourite book: The Power of Habit
Favourite quote: "The world is full of good people, if you cannot find one, be one"
Favourite exercise: The snatch
Favourite colour: Blue
GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
EPL's youngest
- Ethan Nwaneri (Arsenal)
15 years, 181 days old
- Max Dowman (Arsenal)
15 years, 235 days old
- Jeremy Monga (Leicester)
15 years, 271 days old
- Harvey Elliott (Fulham)
16 years, 30 days old
- Matthew Briggs (Fulham)
16 years, 68 days old
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Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
