The military conflict between the United States and Iran, which had been temporarily eased previously, has heated up again. The Gulf region has re-emerged as the focus of attention for the international community. From shipping safety in the Strait of Hormuz and the stability of regional energy supplies to changes in the geopolitical landscape of the Middle East, global attention has been increasingly focused on the security risks that the conflict might bring. Meanwhile, another wave of extreme weather spanning multiple continents continues to shock global public opinion. Driven by the combined effects of the ongoing development of El Niño and global climate change, parts of coastal China have been repeatedly experiencing rainstorms and floods, while Europe has seen persistent heatwaves rarely seen in recent years, with multiple countries breaking historical temperature records for the same period. Extreme weather has once again become a major global issue of widespread concern.

As the shadows of war loom, a relatively overlooked fact in the Gulf region is gradually coming to light, that the Gulf countries are likewise not immune to this global climate change. Despite being geographically distant from the Pacific Ocean, the El Niño phenomenon and the atmospheric circulation changes it triggers continue to exert cross-regional transmission effects on Gulf countries through channels such as grain markets, energy demand, international trade, and capital flows. Concurrently, as global climate change intensifies, various extreme weather events such as extreme high temperatures, prolonged droughts, and sudden rainstorms, alongside incidents like flash floods and water scarcity, are showing more frequent and complex trends in the Gulf region. The State of the Climate in the Arab Region report, released by the World Meteorological Organization, notes that warming in the Arab region has been significantly faster than the global average, with heatwaves, droughts, and extreme precipitation events continuing to intensify. The frequency of regional extreme weather disasters has increased significantly compared to the end of the twentieth century, further exacerbating the problem of water scarcity. In other words, while El Niño is certainly the most watched climate event at present, it functions more as a concentrated manifestation of the continuous intensification of global extreme climate rather than the entirety of the challenges facing the Gulf countries.

Compared to agriculture-based countries that directly bear the shock of reduced yields, Gulf countries face a different kind of structural pressure. Their high dependence on international grain markets forces them to bear the fiscal costs brought about by global agricultural product price fluctuations. At the same time, their high dependence on seawater desalination for water supply causes extreme high temperatures to continuously drive up the energy consumption of cooling and water supply systems. Meanwhile, their highly urbanized development model makes critical infrastructure such as power grids, ports, logistics, and data centers increasingly vulnerable to extreme weather. As it stands, their high degree of economic globalization means that any fluctuations in international shipping, supply chains, and capital markets can rapidly impact their economic operations through cross-market transmission. This risk is no longer manifested as isolated high temperatures, droughts, or floods, but rather as compound risks formed by the combined effects of multiple extreme weather events, the operation of energy systems, the functioning of water resource systems, fiscal expenditure pressures, and global supply chain fluctuations. For Gulf countries possessing stronger fiscal strength, the main issue is the cost required to maintain their existing modernized development models is constantly rising, and the conventional development path relying on oil revenues and infrastructure expansion is causing new constraints.

It is precisely against this backdrop that the series of adjustments undertaken by Gulf countries in recent years on energy systems, water resource systems, and climate resilience are no longer merely components of environmental governance or green transition, but are increasingly part of an overall restructuring of their national development logic. The era of extreme climate is redefining national competitiveness. What will truly determine the long-term development potential of these countries is not merely how much oil and natural gas they possess, but whether they can take the lead in completing the upgrading of their national capability systems, allowing their advantages in energy, water resources, infrastructure, and capital to jointly constitute new development supports.

When it comes to the Gulf countries that have long relied on oil and gas resources for development, the energy system has historically served more to support economic growth and resource exports. As global extreme climates continue intensifying, their strategic positioning is undergoing profound changes. El Niño and global climate change have caused more frequent extreme high-temperature events, leading to a continuous climb in summer cooling demand and a simultaneous increase in electricity consumption for critical infrastructure such as seawater desalination, water supply, transportation, communications, and data centers. Therefore, the energy system is no longer merely related to economic development, but directly concerns urban operations and national security. The International Energy Agency projects that by 2035, cooling and seawater desalination will account for approximately 40% of new electricity demand in the Middle East and North Africa region, implying that the tasks undertaken by future energy systems have gradually shifted from guaranteeing supply to ensuring the sustained operation of the entire modern society.

This change is driving Gulf countries to have a new understanding of energy security. In the past, renewable energy was largely viewed as an important tool for achieving emission reduction targets. Today, the International Renewable Energy Agency (IRENA) increasingly emphasizes that renewable energy itself is also a key support for enhancing national climate resilience and infrastructure resilience. The development of solar energy, wind energy, energy storage, smart grids, and distributed energy not only reduces carbon emissions but also improves power supply continuity under extreme weather conditions, providing more stable energy security for critical facilities such as desalination plants, hospitals, ports, and communication networks. Consequently, the energy systems of these nations have begun to shift from the single pursuit of efficiency and scale toward balancing security, resilience, and adaptive capacity. All in all, the connotation of energy transition has expanded from industrial upgrading to national survival capability building.

The practices of Gulf countries have already reflected this trend. Data from IRENA shows that although the proportion of installed renewable energy capacity in Gulf Cooperation Council countries remains relatively limited for now, the United Arab Emirates has captured the majority share of regional renewable energy capacity and continues to expand investments in new energy. Meanwhile, Saudi Arabia, relying on "Vision 2030", continues to advance large-scale photovoltaic, green hydrogen, grid upgrade, and energy storage project construction, hoping to reduce the proportion of traditional oil and gas power generation and improve the risk resistance of the energy system. This adjustment serves both economic diversification and responds to the new reality of extreme climate continuously raising the operating costs of energy systems. As heatwaves prolong and extreme weather becomes more frequent, the energy system is no longer merely a resource development system, but has become a foundational capability ensuring the stable operation of the nation and supporting the continuous functioning of modern cities, as well as an important link for Gulf countries to reconstruct their development logic.

In addition, there is the restructuring of national development capabilities, where water resources become a new foundation for development. If the energy system determines whether Gulf countries can operate stably, the water resource system increasingly determines the extent to which Gulf countries can develop. Gulf countries have long relied on seawater desalination to break through the constraints of natural endowments, achieving population growth, industrial agglomeration, and urban expansion. However, the continuous intensification of global extreme climate is constantly raising the operating costs of this model. Under the combined effects of El Niño and global climate change, high temperatures continue to increase the energy consumption of seawater desalination and water supply systems, long-term droughts compress natural freshwater resources, and localized rainstorms and flash floods continuously test drainage facilities and urban resilience, making water security gradually become a crucial variable affecting economic development and fiscal sustainability.

This challenge manifests differently within the Gulf countries. Kuwait, Qatar, and Bahrain depend almost entirely on seawater desalination for their drinking water, and the related infrastructure is highly sensitive to stable power supplies and energy prices. Although Saudi Arabia and the UAE also widely rely on desalinated water, they have in recent years continuously advanced water-saving technologies, reclaimed water utilization, smart irrigation, and renewable energy-driven seawater desalination, accumulating stronger buffering capacities in addressing climate risks. The "Water-Energy Nexus" theory proposed by the World Bank further points out that what Gulf countries truly need to restructure in the future is not a single water resource system, but the overall synergistic capacity among energy, water supply, wastewater treatment, fiscal subsidies, price mechanisms, and infrastructure operations. The reason for this is that a shock to any single link can amplify overall risks through system coupling.

Therefore, Gulf countries have continuously increased investments in recent years in fields such as low-carbon seawater desalination, digital water resource management, water recycling, and smart agriculture. The significance of this has transcended simply improving water supply conditions. Rather, it is about building a more stable foundation for development. For resource-based economies, oil still determines the scale of wealth, but water security increasingly determines the quality of development, industrial carrying capacity, and the sustained operational capability of modern cities. Whoever can take the lead in establishing a more efficient and resilient comprehensive water resource system is more likely to maintain long-term development advantages in the era of extreme climate.

Then, there is the restructuring of national competitive capabilities where climate adaptation might mean new international advantages. With the escalating pressure to restructure energy and water resource systems, the thinking of Gulf countries regarding climate change response is also undergoing new changes, namely gradually shifting from purely reducing risks to cultivating new competitive advantages. The United Nations Environment Programme estimates that the current global climate adaptation funding gap still remains as high as USD 194 billion to USD 366 billion annually, and resilient infrastructure, water resource management, flood control engineering, smart agriculture, and urban adaptive capacity building will maintain robust demand for a long time. For Gulf countries possessing fiscal strength, rich large-scale engineering experience, and mature infrastructure construction capabilities, climate adaptation implies not only new fiscal expenditures, but also new industrial directions and international markets.

In recent years, national strategies such as Saudi Arabia's "Vision 2030" and "We the UAE 2031" have elevated energy transition, water security, green infrastructure, and sustainable development to the level of national long-term development. The UAE continues to expand investments in renewable energy and green infrastructure, while Saudi Arabia relies on the Public Investment Fund to deploy green hydrogen, smart cities, and large-scale infrastructure construction. Their goal is no longer merely to rid themselves of dependence on oil and gas revenues, but rather to translate capital strength, engineering capabilities, and governance experience into new advantages for participating in the global climate adaptation industry competition. The World Bank similarly believes that future global infrastructure construction will increasingly emphasize climate resilience, and countries capable of providing related technologies, capital, and governance solutions will occupy more favorable positions in international competition.

Equally worthy of attention is that in recent years, two representative new trends have also emerged regarding the capacity building of Gulf countries in the era of extreme climate, and their importance is continuously rising. On the one hand, the rapid development of artificial intelligence is driving data centers to gradually become a new type of strategic infrastructure. According to the "Energy and AI" report released by the International Energy Agency (IEA), global data center electricity consumption in 2024 was approximately 415 terawatt-hours (TWh), accounting for about 1.5% of global electricity consumption; this figure is projected to increase to approximately 945 terawatt-hours by 2030, with artificial intelligence applications becoming a major driving force behind the growth of data center electricity demand. Meanwhile, aside from the servers themselves, cooling systems are also a vital component of energy consumption for data centers. For Gulf countries that have long faced high-temperature environments, whether the UAE, Saudi Arabia, and other countries continue to advance the layout of their AI industries or build large-scale computing power centers and data centers in the future, it will further raise requirements for stable power supplies, cooling capacity, and energy system resilience. This means that the functions of the energy system are extending further from guaranteeing traditional industries and residential living to new infrastructure supporting the development of the digital economy and artificial intelligence, thereby continuously enhancing its strategic significance. On the other hand, the functional positioning of sovereign wealth funds in Gulf countries is also undergoing new changes. In recent years, institutions such as the Saudi Public Investment Fund (PIF) and Abu Dhabi's Mubadala Investment Company have continuously increased their investment layouts in fields such as artificial intelligence, green energy, and digital infrastructure. Reuters cited public statements from the head of the PIF indicating that Saudi Arabia hopes to rely on its advantages in energy, capital, and policy to build an important artificial intelligence hub outside the U.S., and to take data centers as one of its key future development directions. From this, it can be seen that sovereign wealth funds are gradually moving away from traditional wealth management tools to further shoulder the important functions of cultivating future industries and shaping national competitive advantages. Although these new changes are still in the process of continuous advancement, they already reflect that Gulf countries are more closely combining their advantages in energy, capital, and industrial upgrading, continuously expanding the connotation of national capacity building, and further demonstrating that the restructuring of their development logic is continuing to evolve to deeper levels.

This change also provides new growth space for China-Gulf cooperation. China possesses complete industrial chains and scale advantages in fields such as photovoltaics, energy storage, power grid equipment, seawater desalination, digital infrastructure, and engineering construction, while Gulf countries possess capital, markets, and continuously growing green investment demand. Both sides exhibit strong complementarities in fields such as new energy, water resource management, smart agriculture, and resilient infrastructure. As global competition gradually extends from resource competition to climate adaptation capability competition, Gulf countries are striving to further transform the energy systems, water resource systems, and infrastructure advantages formed during the process of addressing extreme climates into new international competitiveness. In the future, the measurement criteria for a country's competitiveness will not only be how many resources and capital it possesses, but also whether it can establish a development system that is safer, more resilient, and better adapted to the era of extreme climate. This is precisely the direction most worthy of attention in the restructuring of the development logic of Gulf countries.

The era of extreme climate is reshaping the rules of international competition. The standards for measuring a country's competitiveness in the future will not only include resource endowments and capital scale, but will also encompass energy systems, water resource systems, infrastructure resilience, and comprehensive governance capabilities. Gulf countries are attempting to leverage this round of adjustments to transform their capabilities in coping with climate risks into new development advantages, thereby securing a more prominent position in the global green transition and climate adaptation industries.

Final analysis conclusion:

As extreme climates continue to intensify, natural climate phenomena have long been an important window for observing changes in the global economy, energy systems, and national development models. For Gulf countries, what truly needs to be restructured is not merely the energy structure or industrial layout, but the foundational logic of their entire national development. From enhancing the resilience of energy systems and reshaping water security to cultivating climate adaptation capabilities and new international competitive advantages, Gulf countries are likewise actively or passively responding to the long-term challenges brought by the era of extreme climate amid pressure. Whoever can take the lead in completing this restructuring of development logic will be more likely to maintain sustained competitiveness in the new environment where global climate change continues to deepen, and occupy a more favorable position in the evolution of the international economic landscape.

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Zhou Chao is a Research Fellow for Geopolitical Strategy programme at ANBOUND, an independent think tank.