The Persian Gulf, a laboratory for the future

Few regions serve as better case studies for the water–energy–food nexus than the Gulf Cooperation Council (GCC) countries. The six member states of the GCC possess some of the world’s lowest levels of renewable freshwater resources while simultaneously maintaining high standards of living, rapid urban growth, and ambitious economic development programs. Yet despite extreme water scarcity of about 80-100 m3 per capita (roughly a tenth of what European countries are endowed with), Gulf countries have largely avoided the food crises that many observers once predicted. Gulf countries can provide drinking, sanitation, and industrial water to their citizens and economies, but lack any meaningful agricultural water availability. However, their success has rested on a unique model of resource security built upon energy exports, global trade, and sovereign wealth.

At the heart of this model lies a simple but powerful idea: food can be imported, and with it the water required to produce it. The concept of virtual water, developed by the late British geographer Tony Allan, transformed the way policymakers understand water scarcity in the Middle East and beyond. Virtual water refers to the water embedded in agricultural commodities. When a country imports wheat, rice or meat, it is effectively importing the water that was used to produce those goods elsewhere (see the figure below for examples). For water-scarce nations, international food trade therefore represents the primary mechanism for importing freshwater indirectly.

The limits of domestic production 

No region has relied more heavily on this principle than the Gulf. For decades, Gulf states have attempted to overcome environmental constraints through technology and subsidies. Saudi Arabia’s wheat self-sufficiency program became one of the most ambitious agricultural experiments of the twentieth century. Beginning in the 1970s, generous government support enabled farmers to cultivate wheat in desert regions using deep fossil groundwater reserves. By the 1990s, Saudi Arabia had become one of the world’s top-10 wheat exporters despite possessing virtually no renewable freshwater resources, owing to its largely desert geography. The achievement was impressive but unsustainable. The program depended on the extraction of non-renewable aquifers accumulated over thousands of years. As groundwater reserves declined, the economic and environmental costs became increasingly difficult to justify. In 2008, Saudi Arabia announced the gradual phase-out of domestic wheat production, marking a significant shift in thinking. Food security would no longer be pursued through self-sufficiency but through secure access to international markets.

This transition reflected a broader regional recognition that water scarcity could be managed not by producing more food domestically but by purchasing food abroad. Hydrocarbon revenues provided the financial foundation for this strategy. Oil and gas exports generated the income necessary to import cereals, meat, dairy products, and processed foods from regions with abundant land and water resources. In effect, Gulf states exchanged hydrocarbons for virtual water.

This exchange represents one of the most successful examples of resource substitution in modern economic history. Rather than using scarce domestic water to produce food, Gulf countries preserved their limited freshwater resources while relying on global markets to meet growing demand. Energy revenues transformed environmental vulnerability into economic resilience. Yet the apparent simplicity of this model conceals a deeper set of interdependencies linking water, food and energy systems. 

The impact of the first food crisis of the 21st century 

The global food price crisis of 2007–08 exposed these vulnerabilities. Sharp increases in food prices, combined with export restrictions imposed by major producing countries, generated concerns across the Gulf about excessive dependence on international markets. While wealthy states could generally afford higher prices, policymakers became increasingly concerned about supply security. The crisis highlighted the reality that food imports depend not only on purchasing power but also on the stability of global supply chains and political decisions made in exporting countries.

As a result, Gulf governments began to complement food imports with a second strategy: strategic overseas investment.

Saudi Arabia, the United Arab Emirates, and Qatar encouraged investments in agricultural land, food processing facilities, logistics infrastructure, and agribusiness companies across Africa, Asia, and Eastern Europe. While some early land acquisition projects attracted international controversy and produced mixed results, they reflected a broader effort to diversify sources of food supply and reduce exposure to market disruptions. More importantly, food security became increasingly linked to the activities of sovereign wealth funds.

The Gulf’s sovereign wealth funds collectively manage several trillion dollars in assets. Institutions such as the Public Investment Fund, the Abu Dhabi Investment Authority, and the Qatar Investment Authority have traditionally focused on wealth preservation and economic diversification. Increasingly, however, they also serve as instruments of strategic resilience. In 2021, the Abu Dhabi-based sovereign wealth fund ADQ acquired a 45 percent equity stake in the agricultural commodity group Louis Dreyfus Company, which is one of the key global grain traders based in Switzerland. Part of the deal has been a long-term agreement to sell agricultural commodities to the UAE, bolstering domestic but also regional food security thanks to Jebel Ali’s crucial role as one of the most important regional ports.

Food security is no longer simply a matter of purchasing agricultural commodities. It depends upon access to shipping networks, storage facilities, transport corridors, agricultural technologies, and global supply chains. Sovereign wealth funds have therefore expanded their presence in sectors ranging from logistics and infrastructure to food processing and agritech.

The UAE provides perhaps the clearest example of this approach. Through investments in ports, logistics hubs, and shipping infrastructure stretching from the Gulf to the Mediterranean, East Africa, and South Asia, the country has developed a global network that strengthens its access to food imports. Most importantly, these investments generate commercial returns while simultaneously enhancing national food security.

The Qatari resilience strategy 

Qatar’s experience during the 2017 Gulf blockade further reinforced the importance of resilient supply chains. The sudden disruption of traditional trade routes exposed vulnerabilities in food imports, particularly for perishable products. In response, Qatar rapidly diversified suppliers, expanded strategic reserves, and accelerated investments in domestic food production technologies. The crisis demonstrated that food security depends not only on availability and affordability but also on logistical flexibility.

The next challenge facing Gulf food systems comes from climate change. The virtual water model assumes that food-producing regions elsewhere will continue generating agricultural surpluses. Yet climate change threatens precisely those conditions. Rising temperatures, changing rainfall patterns, prolonged droughts, and extreme weather events are already affecting agricultural productivity in many of the world’s major breadbasket regions. This creates a new form of vulnerability. Gulf countries may import water through food trade, but they remain dependent on the environmental stability of exporting nations. Climate-induced disruptions in agricultural production can quickly translate into higher prices, reduced availability and increased competition for supplies.

The war in Ukraine provided a stark illustration of this reality. Russia and Ukraine play a critical role in global grain markets, supplying wheat and other commodities to countries across the Middle East. The conflict disrupted exports, increased transportation costs, and contributed to wider food price inflation. Although Gulf states were generally better positioned than many developing countries to absorb these shocks, the episode underscored the geopolitical risks embedded within global food systems. Recent disruptions in the Red Sea and the Persian Gulf have reinforced similar concerns. Maritime chokepoints remain essential for the movement of food, energy, and manufactured goods between Asia, Europe, and the Middle East. Any interruption along these routes can increase costs and complicate supply chains. In an increasingly fragmented geopolitical environment, food security is becoming inseparable from broader questions of trade security and maritime stability.

The importance of energy in the WEF Nexus 

At the same time, the energy transition introduces longer-term uncertainty into the Gulf’s food security equation. For decades, hydrocarbon revenues financed food imports and strategic investments. While oil and gas will continue playing a major role in the global economy for the foreseeable future, Gulf policymakers recognize that future prosperity cannot depend solely on hydrocarbons. This explains the growing emphasis on economic diversification, renewable energy, and technological innovation. The relationship between water, energy, and food is being reimagined through investments in solar-powered desalination, controlled-environment agriculture, precision farming, the production of neoproteins, cellular agriculture, and artificial intelligence-driven logistics systems. All these systems will need a reliable supply of clean energy.

Desalination is particularly important. The Gulf already produces the majority of the world’s desalinated water, and technological improvements are reducing both costs and energy requirements. As renewable energy expands, desalination offers the possibility of increasing water availability while reducing carbon emissions. Although desalinated water alone cannot eliminate dependence on food imports, it can support higher-value agricultural activities such as innovative food production systems and improve overall resource resilience. The future of Gulf food security will therefore depend less on achieving self-sufficiency and more on strengthening resilience across interconnected systems. Virtual water imports will remain essential, especially for grains from North and South America, Africa, Australia, Northern Asia, and Central Asia. Moreover, fruits and vegetables secured through the UAE-India food trade corridor will remain essential. Sovereign wealth funds will continue playing a strategic role in securing access to such global food networks. Energy revenues, whether derived from hydrocarbons or increasingly diversified economic sectors, will remain central to financing these arrangements.

What is changing is the complexity of the challenge 

The Gulf’s food security model was built in an era characterized by expanding globalization, relatively stable trade networks, and abundant energy revenues. The coming decades are likely to be defined by climate stress, geopolitical fragmentation, and technological transformation. Navigating these pressures will require an integrated approach that recognizes the interdependence of water, energy, and food systems.

The Gulf’s experience offers an important lesson for the wider world. Water scarcity does not automatically produce food insecurity. Through trade, investment, and innovation, countries can overcome severe environmental constraints. Yet resilience ultimately depends upon the ability to manage interconnected risks across multiple systems. In this respect, the Gulf has become a laboratory for the future of resource security.

The challenge ahead is not simply securing food. It is maintaining the economic, environmental, and geopolitical foundations that make food security possible in the first place.