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RIYADH: Oil and gas will remain the backbone of global energy markets despite growing momentum for renewables, the Arab Energy Organization’s secretary-general said, urging the region to broaden its energy mix. 

Speaking at the release of the AEO’s second-quarter 2025 monitoring report on renewable energy, energy transition, and climate change, Jamal Al-Loughani said the region must adopt multiple energy sources. 

The AEO, formerly the Organization of Arab Petroleum Exporting Countries, was restructured and renamed following a Saudi proposal adopted during its 113th ministerial meeting in Kuwait in December 2024. The move reflects efforts to expand its mandate beyond petroleum to cover the full spectrum of energy developments. 

The restructuring comes as rapid transformations reshape the global energy sector, compelling Arab states to adapt to broader trends in clean technology and sustainable investments. 

“Diversification of the energy mix is essential, but no source should be excluded,” Al-Loughani said in a statement to Kuwait News Agency. 

“Oil and gas will continue to dominate with a share of over 50 percent both now and in the future,” he added. 

The secretary-general attributed oil and gas’s continued dominance primarily to growing demand across all economic sectors, including transportation and electricity, and their increasing necessity in various industries such as petrochemicals, fertilizers, and heavy manufacturing. 

He said increased investment and innovation by the organization’s member states in clean technologies like carbon capture, utilization, and storage will make the petroleum industry more sustainable and reliable in meeting growing energy demand. 

The report noted a “significant global expansion in the renewable energy sector during the second quarter 2025, driven by major investments and supportive policies.” 

China maintained its global leadership, accounting for half of the world’s solar capacity, advancing the largest floating wind turbine, and beginning construction on the world’s biggest hydroelectric dam. 

In the US, clean energy provided most of the electricity for three consecutive months for the first time. India also saw a sharp rise in added renewable capacity, supported by solar projects. 

Al-Loughani said many Arab nations have adopted policies supporting renewables based on economic diversification. Despite this positive momentum, he also said the sector faces challenges, most notably political and regulatory instability in some markets. 

“Enhancing the infrastructure for renewable energy projects is no longer an option but has become a necessity,” as climate risks increase significantly alongside growing global interest in renewable sources, he added.

The AEO secretary-general outlined the Arab world’s potential for competitively priced green hydrogen production, which can be used for decarbonization directly or through derivatives like ammonia. This could attract foreign investment, create quality jobs, improve trade balances, and add value through exporting low-carbon products. 

“Achieving success in energy transitions requires aligning ambitions with executive capabilities through adopting realistic steps, pumping long-term investments, and establishing reliable regulatory frameworks,” he said, adding that effective energy transitions are no longer just an environmental issue but a foundation for economic stability. 

A significant financing gap remains, with over 90 percent of global clean energy investments since 2021 going to advanced economies and China, despite 80 percent of future energy demand growth coming from developing nations, Al-Loughani said. This reflects a structural imbalance that must be addressed to ensure a just and effective global energy transition. 

He also highlighted nuclear power as a pivotal strategic option for enhancing global energy security and reducing emissions, with small modular reactors opening new prospects. Furthermore, he identified critical metals markets as a strategic element for the clean energy transition, though geopolitical constraints could pose crucial tests for global supply chains. 

Regarding the digital economy, Al-Loughani said that data centers are now a vital part of global infrastructure, and their role is expected to grow with the advancement of artificial intelligence. Sustaining this growth requires major coordination to ensure clean power and develop innovative solutions to reduce consumption. 

He also said climate change is no longer a long-term challenge, but a reality that requires urgent global action for adaptation, mitigation, and protection. 

Al-Loughani added that the UN’s COP30 conference must be a turning point that is not limited to achieving ambitions, but also includes justice, equity, and finance for those who face the risks of climate change. 

He also cited artificial intelligence as holding significant potential to reduce greenhouse gas emissions by improving energy efficiency, distribution, and disaster management. 

JEDDAH: ��������’s labor market is transforming, with unemployment among the Kingdom’s nationals hitting record lows and the nation raising its Vision 2030 employment targets to reflect this accelerated progress.

Minister of Human Resources and Social Development Ahmed Al-Rajhi announced during the Budget Forum 2024 that �������� has revised its unemployment target for nationals to 5 percent by 2030, down from the previous goal of 7 percent.

“The unemployment rate among Saudis was 12.8 percent in 2018, and today it has dropped to 7.1 percent. The Vision 2030 target was to reduce Saudi unemployment to 7 percent by 2030, a milestone we have achieved six years ahead of schedule,” Al-Rajhi said at the time.

He added that for this reason, Crown Prince Mohammed bin Salman “directed a review of that target, and now we have a new ambition: to reduce the unemployment rate among Saudis to 5 percent by 2030.”

According to the latest data from the General Authority for Statistics, known as GASTAT, unemployment among Saudi nationals fell further to 6.3 percent in the first quarter of 2025 — the lowest level on record.

Labor force participation among Saudis rose to 51.3 percent, with notable gains among women and core working-age citizens.

Women’s economic participation surpasses Vision 2030 target

A significant achievement highlighted by Al-Rajhi was the surge in the participation of Saudi women in the workforce, adding: “The economic participation rate of females has reached 35 percent, exceeding the Vision 2030 target of 30 percent by 2030.”

GASTAT’s first quarter 2025 data supports this trajectory, showing a female labor force participation rate of 36.3 percent, while the unemployment rate among Saudi women declined to 10.5 percent. 

Among young Saudi women aged 15 to 24, participation rose to 18.4 percent, and the employment-to-population ratio climbed to 14.6 percent.

Youssef Saidi, a research fellow at the Economic Research Forum and member of the Saudi Economic Association, told Arab News: “To sustain and enhance this progress, it is crucial to implement supportive policies that encourage women’s entrepreneurship and provide access to resources and training opportunities.”

He added that fostering collaboration between the government and private sectors can create a robust ecosystem that supports female entrepreneurs, addressing barriers and promoting sustainable development.

Youth employment progresses, challenges remain

While youth unemployment is declining, participation rates are mixed. GASTAT data shows the unemployment rate among Saudi males aged 15 to 24 fell to 11.6 percent, but labor force participation dropped to 33 percent, and their employment-to-population ratio declined to 29.2 percent.

Speaking to Arab News, Mansoor Ahmed, an independent economic adviser, said: “Despite overall progress, unemployment among young Saudis aged 15–24 remains higher than the national average.” 

He added that addressing this issue requires targeted policies and tailored employment programs to better integrate youth into the labor market.

Vision 2030 reforms driving new opportunities

��������’s success in lowering unemployment stems from a range of labor reforms and national transformation initiatives. Ahmed said: “This achievement has been underpinned by robust economic policies, strategic government initiatives, and sustained labor market reforms.”

He cited key enablers such as the Human Capability Development Program, the sharp decline in female unemployment — from 31.7 percent in 2018 to 10.5 percent in 2025 — and giga-projects such as NEOM, Qiddiya, Red Sea Project, and Diriyah Gate, which are entering high-employment phases. 

Sector-specific Saudization policies in retail, consulting, and aviation, as well as legal services, and technology, have also played a role.

Reflecting on the main challenges facing the country, Ahmed flagged youth employment volatility, noting that “despite overall progress, unemployment among young Saudis, aged 15–24, remains higher than the national average.”

He also highlighted public-private sector wage disparities, stating that many private sector positions continue to offer lower wages and benefits compared to public sector roles, dampening interest among some Saudi job seekers. “Narrowing this gap will be essential to sustain private sector employment growth,” he said.

Education–labor alignment key to 5 percent goal

The Ministry of Human Resources and Social Development has implemented 84 percent of the Labor Market Strategy over the past four years, creating 300,000 jobs in specialized professions such as engineering, accounting, pharmacy, and radiology.

One standout initiative is the Waad National Training Program, launched in partnership with the private sector. It has provided over 1.3 million training opportunities, equipping Saudis with practical skills aligned to labor market needs.

This initiative exemplifies how targeted training and public-private collaboration drive employment outcomes, helping thousands transition into specialized and emerging sectors.

To support these changes, the ministry has also modernized labor regulations, amending more than 38 articles to enhance workforce flexibility and protection. New insurance products, including domestic worker and labor market insurance, have been introduced to safeguard employers and employees.

“Regarding beneficiary satisfaction: previously, the ministry in the labor sector received 60,000 visitors to its branches across the Kingdom each month,” Al-Rajhi said. He added that after launching automation services, this number has dropped to 3,000.

GASTAT data shows 75.8 percent of job seekers approached employers directly, 74.6 percent used the national employment platform Jadarat, and 64.5 percent updated their resumes on professional social media — reflecting a shift toward digital engagement and more efficient job searches.

Al-Rajhi noted that a new phase of the strategy has been submitted for approval, aiming to elevate the Saudi labor market to global competitiveness.

Future workforce focus

Ahmed emphasized that further progress requires a holistic approach. He said that encouraging greater private sector employment of Saudis beyond Saudization policies demands a comprehensive strategy.

“A particularly critical factor will be improving the alignment between education outcomes and labor market requirements, ensuring that graduates possess the skills and competencies demanded by the private sector,” he said.

He added that by pursuing this integrated approach, saying: “The Kingdom can foster a virtuous cycle where private firms are driven to hire, develop, and retain more Saudi nationals.”

Saidi echoed the need for stronger integration between education and labor market outcomes, stressing the importance of incorporating emerging technologies into curricula so students acquire relevant future skills.

He added: “Collaboration with industry leaders can provide practical training opportunities, bridging the gap between education and employment and ensuring that graduates are well-prepared for the demands of the modern workforce.”

The economist emphasized the need for a long-term cultural shift in education to promote continuous learning and adaptability. “This can be achieved by incorporating entrepreneurial education and sustainability topics into the curricula, promoting awareness and skills necessary for the evolving economic landscape,” he added.

Under this direction, the country has recently announced it will integrate artificial intelligence education throughout its public school system beginning in the coming academic year.

High-potential sectors for Saudi workers

Commenting on sectors with strong potential to absorb more Saudi workers soon, Ahmed pointed to construction and infrastructure; healthcare — which he said will require more than 30,000 new hospital beds by 2030; and tourism and hospitality, especially in customer-facing and management roles.

iInformation and communication technology; artificial intelligence; and retail were also highlighted, as well as logistics; renewable energy; and environmental technologies.

These sectors, he added, are driven by Vision 2030 priorities, economic diversification efforts, and proactive government initiatives. To align with this evolving landscape, he noted, �������� must strengthen its focus on evidence-based research, innovation, and targeted workforce development.

“This transition aims to address the persistent mismatch between graduates’ qualifications and labor market requirements, ensuring the national workforce is equipped with the skills and expertise needed to thrive in a dynamic, diversified economy,” Ahmed said.