Europe is scrambling to reroute trade and energy away from the Strait of Hormuz after the Iran war sent shockwaves through global fuel prices and exposed how quickly ordinary people can be made to pay for conflicts driven from above. The European Union is now looking to Gulf states and India for alternatives, while its leaders talk up “energy security” and “strategic autonomy” as if the problem were merely logistics and not the whole machinery of power that keeps the taps, pipelines and profits under control.
Who Pays When the Routes Break
European Commission President Ursula von der Leyen told G7 leaders at this week’s summit that “alternative export routes have been created that are more resilient and offer choices” and that “other routes will be built — for example, a typical one is IMEC.” Her pitch came as the EU said it had spent 25 billion euros ($29 billion) more in the first 54 days of the Iran war to import oil and gas, while also facing the risk of a longer-term jet fuel shortage. The bill, as usual, lands on the public side of the ledger while the institutions at the top speak in the language of resilience.
The bloc is exploring the India-Middle-East-Europe Economic Corridor, or IMEC, as a way to reduce exposure to conflict-related disruption. The EU has supported IMEC through a memorandum of understanding, but only a handful of its 27 member states are formal signatories. A high-ranking EU diplomat, speaking on condition of anonymity because he was not authorized to disclose confidential discussions, said the focus is now on turning the vision into practical implementation across transport and trade connectivity, energy connectivity and digital connectivity. He said it could involve new pipelines and transmission cables, among other infrastructure. The EU’s press office declined to provide a prospective timeline.
The Corridor Built by States and Bosses
IMEC would pass through Israel and enjoys its support. Israeli Prime Minister Benjamin Netanyahu last year said he had spoken with his Indian counterpart Narendra Modi about IMEC, calling it “a very revolutionary and transformative development that we want to bring into place.” The project is being sold as a grand fix for supply chains and energy flows, but it is still being shaped by governments, corporate interests and diplomatic bargains.
Lianne Pollak-David, co-founder of the Israel-based Coalition for Regional Security, told a recent online briefing that U.S. leadership would be key to moving IMEC forward by helping in the normalization of relations between Israel and Saudi Arabia, an essential player in the project. “Without normalization between Israel and Saudi Arabia, IMEC cannot be truly realized,” she said. Saudi Arabia has said it will only normalize relations with Israel if accompanied by a clear pathway to Palestinian statehood, something Netanyahu opposes. It remains unclear how the Iran war, launched by the U.S. and Israel and damaging to Gulf Arab countries, may influence Saudi Arabia’s thinking. Saudi officials declined to comment when asked about their position regarding IMEC.
Von der Leyen and European Council President Antonio Costa said during an EU leaders’ meeting in April that the bloc is “ready to team up with Gulf countries” to help set up new energy infrastructure circumventing conflict hot spots like the Strait of Hormuz. The language is polished; the aim is plain: keep the flow moving, keep the system insulated, keep the disruption away from the centers of accumulation.
Infrastructure for the Powerful, Costs for Everyone Else
The value of alternatives is already visible in the East-West Pipeline running across Saudi Arabia from its eastern oil fields to the Red Sea. After the Iran war started, Aramco ramped up transport to the maximum capacity of 7 million barrels of oil per day. The leaders of G7 nations are discussing ways of financing and building infrastructure, “sometimes on the terrestrial part, that will be able to go outside of the track of the Strait of Hormuz,” French Foreign Ministry spokesperson Pascal Confavreux told The Associated Press.
Neither von der Leyen nor Costa have provided specifics on EU-backed projects, which could also form part of IMEC. But an EU official told The Associated Press that the bloc would encourage European companies to invest in renewable energy projects in the Gulf to supply the EU’s energy demand. The official spoke on condition of anonymity because they could not speak about the EU’s plans publicly. The public gets the rhetoric of transition; the companies get the investment opportunities; the people living through the fallout get the price shocks.
Getting the EU involved with collaborative projects in Gulf countries will take time, according to Gabriel Mitchell, an analyst with the German Marshall Fund think tank. He said the most likely projects in the near term are oil and gas pipelines, which have the shortest construction timeline, and subsidizing repairs at Gulf facilities that Tehran targeted during the war. Mitchell said any new projects would need to fall in line with the EU’s green policies, which means pipelines, for example, would likely be built with future dual-use capabilities of transporting both gas and possibly hydrogen.
Another project is the Great Seas Interconnector, an EU-backed electricity cable envisioned to stretch 1,208 kilometers (750 miles) to connect the power grids of continental Europe with EU member Cyprus and eventually Israel. The GSI is bogged down in red tape over its financing, but its potential is significant not only for ending the energy isolation of Cyprus and Israel but also acting as an energy link to India and likewise forming part of IMEC.
Gallia Lindenstrauss, senior fellow with the Israel-based Institute for National Security Studies, called GSI a “very pragmatic solution for the modern energy needs” that paves the way for the transition to green energies. “As energy security and grid backup move to the forefront of the global agenda, this project provides a flexible platform,” Lindenstrauss said. The phrase “flexible platform” does a lot of work for a project that is still tangled in financing and designed to serve state and market priorities.
The U.S. is helping to foster closer energy ties among Greece, Cyprus and Israel as it sees the Eastern Mediterranean as “an increasingly important region for global energy development,” U.S. Secretary of Energy Chris Wright said last week. Wright was in Houston to inaugurate the Eastern Mediterranean Energy Center at Rice University, which aims to boost cooperation on developing natural gas deposits, U.S. liquefied national gas infrastructure and energy transportation networks in the European region. The apparatus keeps building itself, one corridor and cable at a time, while the people at the bottom are told this is what stability looks like.