ABSTRACT
Energy has fundamentally shaped the economies of the Gulf oil and gas producers. This chapter explores the short-term effects of shifting energy dynamics, with a particular focus on fiscal dynamics, including increased pressure on Gulf governments to reduce long-term spending commitments. Beyond short-term considerations of immediate fiscal liquidity, the Gulf States' long-term resilience to changing market conditions rests on a far broader spectrum of policy choices. The chapter discusses the long-term implications and policy imperatives that follow current changes in the global and regional energy landscape. The domestic debates which several Gulf Cooperation Council economies face about the reform of domestic energy pricing systems and energy subsidies illustrates the enormous potential of the low oil price environment, both in challenging governments and providing opportunities for reform. The perceived abundance of oil and natural gas reserves and low domestic energy prices has also influenced the composition of GCC economies' domestic energy mix.
