The Iran war has driven Europe to pay an additional 25 billion euros ($29 billion) for oil and gas imports within its first 54 days, while facing the risk of a longer-term jet fuel shortage. This surge in costs for European consumers and industries coincides with increased production for energy corporations, as Saudi Aramco ramped up transport to its maximum capacity of 7 million barrels of oil per day via the East-West Pipeline after the conflict began.
War's Windfall for Capital
European Commission President Ursula von der Leyen and European Council President Antonio Costa stated in April that the bloc is “ready to team up with Gulf countries” to establish new energy infrastructure. This move aims to circumvent conflict hot spots like the Strait of Hormuz, which has been disrupted by the Iran war, launched by the U.S. and Israel.
European leaders are now prioritizing the India-Middle-East-Europe Economic Corridor (IMEC) as a means to bolster the bloc’s “strategic autonomy” and achieve “economic resilience, supply-chain diversification and energy security.” The EU has formally supported IMEC through a memorandum of understanding, with a high-ranking EU diplomat confirming strong political commitment behind the scenes.
This commitment is focused on “translating that vision into practical implementation across its three pillars: transport and trade connectivity, energy connectivity and digital connectivity.” Such implementation is expected to involve new pipelines and transmission cables, among other infrastructure projects, representing significant capital investment opportunities.
An EU official, speaking anonymously, indicated that the bloc would encourage European companies to invest in renewable energy projects in the Gulf to meet the EU’s energy demand. Gabriel Mitchell, an analyst with the German Marshall Fund, noted that the most immediate projects are likely oil and gas pipelines, which have the shortest construction timelines, alongside subsidizing repairs at Gulf facilities targeted during the war.
Imperial Ambitions and Infrastructure
Israel, a key U.S. ally and a party to the war, supports IMEC, with Prime Minister Benjamin Netanyahu calling it “a very revolutionary and transformative development.” The U.S. is actively fostering closer energy ties in the Eastern Mediterranean, with Secretary of Energy Chris Wright inaugurating the Eastern Mediterranean Energy Center at Rice University last week. This center aims to boost cooperation on developing natural gas deposits, U.S. liquefied natural gas infrastructure, and energy transportation networks in the European region, securing U.S. capital interests.
Another EU-backed project, the Great Seas Interconnector (GSI), is envisioned as a 1,208-kilometer (750-mile) electricity cable connecting continental Europe with Cyprus and Israel. This project is presented as a “very pragmatic solution for the modern energy needs” and a “flexible platform” for green energy transition, despite being bogged down in financing red tape. Its potential extends to linking with India, forming another component of the IMEC strategy for capital accumulation.
French Foreign Ministry spokesperson Pascal Confavreux confirmed that G7 nations are discussing ways to finance and build infrastructure, including terrestrial routes, to bypass the Strait of Hormuz. These discussions underscore the coordinated efforts of imperial powers to secure resource flows and protect corporate profits in the face of geopolitical instability.
Geopolitical Friction and Capital's Path
Lianne Pollak-David, co-founder of the Israel-based Coalition for Regional Security, highlighted that U.S. leadership is crucial for IMEC’s progress, specifically by facilitating the normalization of relations between Israel and Saudi Arabia. She stated, “Without normalization between Israel and Saudi Arabia, IMEC cannot be truly realized.”
However, Saudi Arabia has conditioned normalization on a clear pathway to Palestinian statehood, a demand that Netanyahu opposes. This geopolitical friction, rooted in the ongoing dispossession of Palestinians, presents an obstacle to the smooth flow of capital and the full realization of these new energy and trade corridors, revealing the limits of purely economic solutions to political problems. Saudi officials declined to comment on their position regarding IMEC.