(Bloomberg) — The Arab monarchies of the Persian Gulf face a budget reckoning and risk squandering their $2 trillion in financial wealth within 15 years as oil demand nears peak levels, according to the International Monetary Fund.

Global oil demand may start falling sooner than expected, putting a strain on the finances of the six-member Gulf Cooperation Council, which accounts for a fifth of the world’s crude production, the IMF said in a report Thursday.

Without decisive economic reforms, the richest Middle Eastern states could exhaust their net financial wealth by 2034 as the region becomes a net debtor, the fund projects. Within another decade, their total non-oil wealth would also be exhausted, the IMF said in the report prepared by a team of its Middle East and Central Asia specialists as well as the research department.

“Countries in the region need to think long-term and strategically because the oil market is changing structurally both from the demand and the supply side,” Jihad Azour, director of the IMF’s Middle East and Central Asia Department, said in an interview.

Economic reforms already underway in some countries need to accelerate, he said. Development plans need to shift spending and job creation from governments to the private businesses and develop more non-oil sources of income more quickly, he added.

GCC countries would have to be more aggressive in their pursuit of an economic transformation to preserve their current wealth. “If we stop here, it’s not enough,” Azour said.

International oil companies and producing states have come to recognize that alternative energy sources, alongside greater efficiency, are already eroding demand. While Gulf producers like Saudi Arabia and the United Arab Emirates are developing new industries in preparation for a post-oil era, they’re not moving quickly enough to avoid running out of cash, the IMF said.

Gulf oil producers sharply increased budget spending from 2007 and until 2014, when crude plunged. Despite patchy reforms, they haven’t fully offset the drop in oil revenue with spending cuts, leading to deficits that have eroded wealth, according to the report.

Regional governments will likely need to cut spending further, save more and introduce broad-based taxation to make ends meet, the IMF said.

A further decline in oil prices this year, in the face of geopolitical tensions and threats the coronavirus poses to growth, is making that task even harder. Should global oil demand trend downward before those plans take root, the countries would have to cope with their longer-term economic problems even sooner, according to the fund.

“The world’s demand for oil is expected to grow more slowly and eventually begin to decline in the next two decades,” the IMF said.

Global oil demand is likely to peak around 2041 at about 115 million barrels a day and gradually decline from there, according to the report. While that forecast is firmly in line with most industry estimates, some, including the IMF, see potential for oil use to permanently decline even earlier.

Saudi Aramco, citing forecasts from oil industry consultant IHS Markit Ltd., said in its initial public offering prospectus last year that oil demand could peak around 2035. Improved energy efficiency or the imposition of a carbon tax by governments worldwide could bring oil’s demand peak forward to as soon as 2030, the IMF said.

Saudi Arabia, the U.A.E. and Kuwait are the biggest producers in the GCC and are all OPEC members. Risks differ for the GCC states, which also include Qatar, Oman and Bahrain.

The IMF’s outlook offers a broad timeframe in which global oil demand might crest. Revenue may not peak until the middle of the century and Gulf producers could see demand for their oil sustained from other quarters.

Increased use of oil for petrochemicals might help mitigate the slowdown in demand, the IMF said. Even as oil demand peaks, the lower costs of production will allow Gulf states to gain market share over rivals elsewhere.

Even then, under the IMF’s scenario, Saudi Arabia, the U.A.E. and their neighbors face a future of slumping income and reliance on debt to support spending.

“Faster progress with economic diversification and private sector development will be critical to ensure sustainable growth,” the IMF said.