Key facts
- Europe is seeking alternative energy routes due to the Iran war's impact on global fuel prices.
- The India-Middle-East-Europe Economic Corridor (IMEC) is a key initiative being pursued by the EU.
- IMEC aims to enhance energy security and supply-chain diversification for the bloc.
- Normalization of relations between Israel and Saudi Arabia is considered essential for IMEC's realization.
- The EU spent an additional 25 billion euros on oil and gas imports during the initial phase of the Iran war.
- The Great Seas Interconnector is an EU-backed project to link power grids and potentially serve as an energy link to India.
The Iran war's disruption to global fuel prices has intensified Europe's focus on securing alternative energy and trade routes, particularly those that bypass the Strait of Hormuz. The European Union is actively exploring initiatives like the India-Middle-East-Europe Economic Corridor (IMEC) to bolster its energy security and diversify supply chains.
European Commission President Ursula von der Leyen has highlighted IMEC as a crucial project for creating more resilient export routes. This initiative, which involves transport, energy, and digital connectivity, is seen as vital for the EU's strategic autonomy, especially given ongoing geopolitical tensions and evolving international relationships. While the EU officially supports IMEC, the level of formal commitment varies among its 27 member states, though political backing is reportedly strong.
A significant hurdle for IMEC is the requirement for normalization of relations between Israel and Saudi Arabia. Israeli Prime Minister Benjamin Netanyahu has expressed support for the corridor, but Saudi Arabia has indicated that normalization is contingent on a clear pathway to Palestinian statehood, a condition opposed by Netanyahu. The impact of the Iran war on Saudi Arabia's stance remains uncertain, with Saudi officials declining to comment on IMEC.
The EU has already experienced the financial strain of the conflict, having spent an additional 25 billion euros on oil and gas imports in the initial 54 days of the Iran war. Leaders are discussing ways to finance and build infrastructure that circumvents conflict zones like the Strait of Hormuz. The East-West Pipeline in Saudi Arabia serves as an example of an existing alternative that has increased its transport capacity.
Beyond IMEC, the EU is also backing projects like the Great Seas Interconnector, an electricity cable designed to link the power grids of continental Europe, Cyprus, and eventually Israel. This project, though facing financing challenges, could also serve as an energy link to India and contribute to the broader IMEC vision. Analysts suggest that near-term projects might focus on oil and gas pipelines due to shorter construction timelines, with a consideration for future dual-use capabilities for transporting hydrogen, aligning with the EU's green policies.