The relationship between Europe and the Middle East has evolved over centuries, shaped by cultural, political, and economic exchanges. In today’s rapidly shifting geopolitical landscape, energy security and economic cooperation have emerged as dominant themes driving the bilateral relationship between the European Union (EU) and the Gulf Cooperation Council (GCC). As Europe navigates the global energy crisis, political instability in the Middle East, and the need for diversified energy sources, its engagement with the GCC has taken on new significance.

Just last week, GCC Secretary-General Jasem Al-Budaiwi met with EU Commissioner for the Mediterranean Dubravka Suica to discuss a proposed Gulf-European conference on energy security. This meeting, which took place on the sidelines of the Brussels Ninth Conference on Syria, underscored the growing importance of energy cooperation between the two regions. With Europe still adjusting to the energy market disruptions caused by Russia’s invasion of Ukraine, the Gulf region has emerged as a key player in providing energy security and economic stability.

Since 2020, the EU has significantly increased its energy imports from GCC countries. The European Council on Foreign Relations reports that of the more than 180 new energy agreements signed by the EU since the onset of the Ukraine war, the largest number of these agreements have been with GCC states. The UAE leads the pack with 24 deals, followed by Qatar (11), Saudi Arabia (4), Oman (2), and Bahrain (1). These deals highlight Europe’s urgent need to replace its reliance on Russian energy supplies and secure long-term partnerships with reliable Gulf energy producers.

The numbers reinforce this trend: in 2023, imports of mineral fuels accounted for over 75% of EU imports from GCC countries. Furthermore, since 2020, fuel imports have tripled, signaling the depth of the EU’s pivot toward Gulf states for its energy needs. As natural gas and oil supplies from Russia dwindle due to sanctions and geopolitical tensions, Europe’s reliance on Gulf states is set to grow even further in the coming years.

While energy remains the dominant factor in EU-GCC relations, European nations are also increasing their geopolitical involvement in the region. France, Germany, Italy, and the UK are now actively participating in discussions concerning the reconstruction of Gaza. These European powers have become key proponents of a renewed ceasefire that could lead to a sustainable and fair peace agreement.

Europe is increasingly concerned about growing instability in the Middle East, particularly the widening conflict in Gaza, which has threatened to spill over into Lebanon and other areas. While economic ties with Gulf states remain largely unaffected, the EU is aware that prolonged instability could impact its trade and energy interests. To mitigate these risks, Europe has been intensifying diplomatic efforts and exploring new avenues for cooperation with the GCC to maintain regional stability.

While energy security is a pressing concern, the EU’s broader economic engagement with the GCC has also gained momentum. The two sides are actively working toward a long-discussed trade agreement, which is being explored as part of the EU’s broader strategy to strengthen partnerships with key emerging markets. If successful, such a deal would mark a significant step forward in EU-GCC economic relations, following years of negotiations and stalled discussions.

The push for a trade agreement comes as EU Commission President Ursula von der Leyen embarks on her second term, during which she has prioritized deeper engagement with key global economies. Recently, she has finalized a trade agreement with Mercosur (comprising Brazil and Argentina), restarted trade negotiations with India, and visited South Africa in preparation for the upcoming G20 summit. The GCC, as a bloc, remains one of her key economic targets.

With a combined GDP of approximately $2 trillion in 2022, the GCC is a major force in the global economy. According to the World Bank, if the bloc continues to grow at its current trajectory, its combined GDP is projected to reach $6 trillion by 2050. These figures illustrate the Gulf’s economic potential and highlight why the EU sees the region as an attractive trade partner.

A trade deal between the EU and GCC would also facilitate further access to Gulf sovereign wealth funds, which are among the largest and most influential in the world. These funds, known for their long-term, multi-decade investment strategies, could significantly enhance European economic prospects by injecting capital into various sectors, including infrastructure, technology, and renewable energy.

Currently, the EU is the GCC’s second-largest trade partner, with trade between the two blocs reaching €170 billion ($185 billion) in 2023. However, economic ties remain largely energy-focused, with mineral fuels accounting for the majority of GCC exports to Europe. A comprehensive trade agreement could help diversify trade flows by promoting cooperation in areas such as digital technology, manufacturing, and financial services.

One potential development that could further deepen EU-GCC economic ties is the proposed India-Middle East-Europe Economic Corridor (IMEC). This ambitious project aims to enhance connectivity between Asia, the Middle East, and Europe through a network of roads, railways, and shipping routes.

First proposed at the G20 summit in New Delhi in September 2023, IMEC has gained significant traction, with key backers including India, the US, the UAE, Saudi Arabia, France, Germany, Italy, and the EU. If implemented, the corridor would establish a direct trade route from India through the UAE and Saudi Arabia, before connecting to Europe via Greece. Such a development would significantly enhance trade efficiency, reduce transportation costs, and bolster economic cooperation between the EU and the Gulf states.

As Europe continues to grapple with energy security challenges, political instability in the Middle East, and the need for economic diversification, its relationship with the GCC will remain critical. Energy agreements between the two regions are expected to grow further, while diplomatic engagement in the Middle East is likely to become a more permanent feature of European foreign policy.

A potential EU-GCC trade agreement would mark a turning point, unlocking new opportunities for investment and cooperation beyond energy. Additionally, if large-scale infrastructure projects like IMEC come to fruition, they could significantly reshape global trade dynamics, benefiting both Europe and the Gulf region.

Looking ahead, the success of these initiatives will depend on continued diplomatic engagement, political stability, and the ability of both regions to align their economic and security priorities. With energy security and geopolitics remaining at the core of EU-GCC relations, the next decade could see an even closer and more strategic partnership between Europe and the Gulf.

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Source: Weekly Blitz :: Writings