Europe’s ruling institutions are scrambling for alternative trade and energy routes after the Iran war sent shock waves through global fuel prices and raised concerns about the Strait of Hormuz, exposing how quickly ordinary people get squeezed when conflict and supply chains are managed from above.
Who Pays for the Power Games
European Commission President Ursula von der Leyen has renewed interest in the India-Middle-East-Europe Economic Corridor, or IMEC, pitching it to G7 leaders at this week’s summit as a cleaner path for the bloc’s strategic autonomy. She said “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.” The language is polished; the goal is blunt: protect European economic resilience, supply-chain diversification and energy security while Russia shows few signs of curbing its belligerence and the U.S. chips away at strategic bonds.
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 now is on translating that vision into practical implementation across its three pillars: 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 for the project.
Corridors, Cables and Control
IMEC would pass through Israel and has Israeli 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.” Lianne Pollak-David, co-founder of the Israel-based Coalition for Regional Security, said in a recent online briefing that U.S. leadership would be key to moving IMEC forward by helping normalize relations between Israel and Saudi Arabia, which she described as 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 has said the EU spent 25 billion euros, or $29 billion, more on oil and gas imports in the first 54 days of the Iran war and faces the risk of a longer-term jet fuel shortage. She 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 East-West Pipeline across Saudi Arabia from its eastern oil fields to the Red Sea has become an example of such alternatives. After the Iran war started, Aramco ramped up transport to the maximum capacity of 7 million barrels of oil per day.
What They Call Resilience
French Foreign Ministry spokesperson Pascal Confavreux said the G7 leaders 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.” An EU official, speaking on condition of anonymity because they could not speak publicly about the bloc’s plans, said the EU would encourage European companies to invest in renewable energy projects in the Gulf to supply the EU’s energy demand.
Gabriel Mitchell, an analyst with the German Marshall Fund think tank, said collaborative projects in Gulf countries would take time and that the most likely near-term projects 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 fit the EU’s green policies, meaning pipelines would likely be built with future dual-use capabilities for transporting both gas and possibly hydrogen.
Another project is the Great Seas Interconnector, an EU-backed electricity cable envisioned to stretch 1,208 kilometers, or 750 miles, to connect the power grids of continental Europe with EU member Cyprus and eventually Israel. The project is bogged down in red tape over financing, but its potential is significant for ending the energy isolation of Cyprus and Israel and for acting as an energy link to India, while also 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,” she said.
The U.S. is helping foster closer energy ties among Greece, Cyprus and Israel, seeing 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.