Abu Dhabi Defies Oil Price Plunge to Keep Building Big at Home

(Bloomberg) -- Abu Dhabi has spent the past few years funneling oil revenue into building everything from splashy museums to new office towers amid an influx of financial firms. The pace of development is likely to keep up despite a recent slump in oil prices. 

That’s according to the head of the oil-rich city’s tourism and culture department, Mohamed Al Mubarak, who spoke to Bloomberg News as the emirate unveils its latest spectacle — a 17,000-square-meter (182,000-square-foot) digital art museum just a short car ride from Louvre Abu Dhabi.

“Our investments within these fields are not going to stop whether oil is at $55 or oil is at a hundred dollars. That’s something we’re going to continuously focus on,” according to Al Mubarak, who is also on the emirate’s Executive Council. The city is already eyeing more development with plans to soon announce two more mega cultural projects, he said.

Al Mubarak’s comments are some of the first public statements from Abu Dhabi officials on the emirate’s response to falling oil prices. Wealthy Gulf countries have often been the world’s investors of last resort during times of economic turmoil, and the financial outlook for the region is closely watched globally.

Gulf countries have been attempting to diversify their economies to cut their reliance on oil, but with prices hovering at $65 a barrel, questions have grown about whether regional governments will be able to maintain public spending.

Still, Abu Dhabi — one of the world’s biggest exporters of oil — is less vulnerable to price moves than some others. Fitch Ratings said last year that the emirate’s fiscal break-even Brent oil price, excluding certain investment income, would average at $68 over 2025-2026. That’s significantly lower than neighboring Saudi Arabia.

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The capital of the United Arab Emirates has embarked on a $10 billion drive to draw both expatriates and tourists to the city, investing more than 15 billion dirhams ($4.1 billion) on tourism alone over the past five years. That’s helped the city’s non-oil sectors grow about 59% over the past decade, now accounting for more than half of gross domestic product.

Al Mubarak said Abu Dhabi remains focused on the long-term benefits of investing in the city. Building more hotel rooms remains a top priority, he added, noting that properties are near capacity with average occupancy of about 82% so far this year. The city plans to add between 15,000 to 20,000 new hotel rooms by 2030-2032.

Home to large sovereign wealth funds, it’s building high-end offices, luxury homes and hotel rooms to cater to global financial giants like Brevan Howard Asset Management and Greg Coffey’s Kirkoswald Asset Management, who’ve set up in the emirate. 

Tourism and culture made up 9% of Abu Dhabi’s economy last year after the sector grew 22% in 2024. This year the target is to grow that part of the economy to 13% of gross domestic product, Al Mubarak said. 

“Our aspirations are to grow the sector significantly and showcase the diversification of Abu Dhabi,” he said, adding that the industry will create 30,000 to 35,000 jobs this year alone. 

Abu Dhabi has been hosting large concerts and sporting events. Coldplay has played to a packed stadium. The city has also hosted NBA games, with the Boston Celtics facing off against the Denver Nuggets and drawing thousands of spectators. Al Mubarak said Abu Dhabi is open to more such sports partnerships. 

The city will be home to the world’s biggest teamLab museum after the opening on Friday. The original is based in Tokyo, with the locations aiming to immerse spectators into digital art through the help of sounds and smells. 

The city is set to host several other museums including the new Guggenheim. A museum of natural history, which is under development near teamLab, and the Zayed National Museum are expected to be opened later this year.

Abu Dhabi is looking far ahead into the needs of “the next five years, 10 and 15 years,” Al Mubarak said.  

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