Saudi Arabia’s audacious $8 trillion NEOM megacity project is undergoing a quiet but profound transformation, and it’s all tied to one thing: oil. What happens when a nation’s grandest vision collides with the unpredictable swings of the global energy market? This is the story of NEOM, a project once hailed as the future of Saudi Arabia, now facing a reality check that’s reshaping its ambitions. But here’s where it gets controversial: Is NEOM still a visionary leap forward, or has it become a cautionary tale about overreliance on volatile resources? Let’s dive in.
Back in June, Air Products announced that the NEOM Green Hydrogen Project had reached approximately 80% completion across multiple sites. This ambitious initiative includes a state-of-the-art green hydrogen production facility, dedicated solar and wind farms, and a custom-built transmission network. Once operational, it’s poised to become the world’s largest renewable-powered ammonia complex within the next two years. Impressive, right? But this progress comes with a twist. The project’s advancement has unfolded against a backdrop of weaker oil prices than Riyadh had anticipated when NEOM was first conceived. Saudi Arabia’s fiscal health, still heavily dependent on crude oil revenues, has been strained as oil prices remain stubbornly below the levels envisioned in the early stages of Vision 2030. Brent crude, in particular, has struggled to sustain prices high enough to comfortably fund multiple mega-projects simultaneously. This has forced the Kingdom to reassess how it allocates capital across its most ambitious developments. As a result, soaring construction costs coupled with lower oil income have pushed Crown Prince Mohammed bin Salman to order a broad re-evaluation of NEOM’s scale and timelines.
Launched in 2017 as the flagship of Saudi Vision 2030, the $8.8 trillion NEOM project was designed to reduce the Kingdom’s long-term dependence on oil revenues. But here’s the irony: NEOM’s funding remains deeply tied to the very oil market it was meant to help Saudi Arabia transcend. When oil prices dip, discretionary spending tightens, and capital-intensive projects like NEOM are often the first to face cuts—though not outright cancellation. And this is the part most people miss: NEOM’s fate is inextricably linked to the ebb and flow of the global oil market, creating a paradox that’s hard to ignore.
Take The Line, for example, which was meant to be NEOM’s crown jewel—a 170-kilometer stretch of mirrored towers cutting through the desert. It was built on the assumption that Saudi Arabia could rely on years of robust oil revenues to fund such a colossal project. But that assumption is no longer holding up. With oil prices failing to generate the surplus Riyadh needs, The Line has been drastically downsized to a short pilot stretch, leaving most of the original route as empty desert. What was once envisioned as a single, continuous megacity is now being fragmented, with funding directed only to parts of NEOM that can still be justified amid lower oil revenues and rising domestic spending.
In this context, the NEOM Green Hydrogen Project stands out—not because it’s immune to budget pressures, but because it aligns directly with Saudi Arabia’s evolving oil-market strategy. Green hydrogen and ammonia exports are increasingly seen as future revenue streams that could complement, rather than replace, crude oil exports. This explains why the hydrogen complex has continued to move forward even as other NEOM components have been delayed, downsized, or quietly shelved. But is this a strategic pivot or a temporary band-aid? That’s a question worth debating.
Here’s the bottom line: NEOM’s trajectory is dictated by oil prices. When they’re high, Saudi Arabia can afford to pursue projects of this magnitude. When they’re not, plans are scaled back. With crude prices falling short of Riyadh’s funding needs, NEOM is being resized rather than scrapped. Vision 2030 remains the official plan, but it’s now being shaped by a weaker oil market, not the rosier assumptions of the past.
Let’s break down the key components of NEOM and their current status:
#1. The Line
Status: Downsized
Originally envisioned as a 170-kilometer, 9-million-resident city built on 34 square kilometers of land, The Line was meant to showcase unprecedented efficiencies in urban design. However, it has been significantly shrunk to a 2.4 to 5-kilometer pilot phase dubbed the "Hidden Marina," with completion targeted by 2030. The focus has shifted from a futuristic megacity to a more pragmatic, technology-driven hub, potentially leveraging its infrastructure for data centers and AI. With $50 billion spent by late 2025 and oil prices on the decline, the overall $1.5 trillion budget is under scrutiny. Most of the projected 170-kilometer area remains undeveloped, with construction concentrated only on the initial section.
#2. Trojena
Status: Under Review/Downsized
Billed as the Arabian Peninsula’s first ski resort, Trojena is a $500 billion year-round mountain destination in the Tabuk region, featuring 30 kilometers of ski runs, a 2.8-kilometer artificial lake, and luxury accommodations. However, the project is currently under review, and the 2029 Asian Winter Games, originally scheduled for Trojena, have been postponed due to construction delays. Trojena Sky Village, a key highlight, will also be downsized. Is this a pioneering project or a costly misstep? The jury’s still out.
#3. Sindalah
Status: Unclear
NEOM’s luxury island destination, Sindalah, is designed as a premier yachting and tourist hub, featuring an 86-berth marina, three luxury hotels, and 440 rooms. While a "soft launch" was celebrated in October 2024, reports suggest varying timelines for its full operational status. Amid delays, there were plans to transfer the project to another Public Investment Fund to expedite development. However, it remains unclear whether the tourist hub will be completed as initially planned, with reports of scale-backs and job cuts adding to the uncertainty.
#4. Mukaab
Status: Scrapped
The Mukaab, a 400-meter cube-shaped skyscraper in Riyadh, was designed to be the world’s largest enclosed structure, featuring AI-powered immersive displays. However, construction has been suspended following a re-evaluation of its financial viability. The project was controversial from the start due to its resemblance to the Kaaba in Mecca, Islam’s holiest site. Was this a bold vision or a cultural misstep? The debate continues.
#5. Diriyah
Status: Under Construction
Diriyah, a $63 billion project on the outskirts of Riyadh, is transforming a UNESCO World Heritage site into a cultural and lifestyle destination. Blending traditional Najdi architecture with modern development, it’s considered central to Vision 2030 and is unlikely to face significant cuts.
#6. Qiddiya
Status: Under Construction
Qiddiya, a 360-square-kilometer entertainment and sports city, is another key component of Vision 2030. Featuring Six Flags Qiddiya and the "Falcon's Flight" roller coaster, it’s expected to be fully operational by 2034. Like Diriyah, it’s seen as too central to the vision to be scaled back.
So, what’s the takeaway? NEOM’s evolution raises critical questions about the balance between ambition and practicality, especially in a world where energy markets are increasingly unpredictable. Is Saudi Arabia’s Vision 2030 still achievable, or will it need to be reimagined? And what does this mean for other nations pursuing mega-projects in an era of economic uncertainty? Let us know your thoughts in the comments—this is a conversation worth having.
