Europe turns to the Gulf to strengthen energy, security ties

The relationship between the Middle East and Europe has been shaped by centuries of cultural, political, and economic interaction. Today, energy security and geopolitics, in particular, have become even bigger drivers of the important bilateral relationship.
Only last week, Jasem Al-Budaiwi, the Gulf Cooperation Council secretary-general, spoke with EU Commissioner for the Mediterranean Dubravka Suica about a proposed new Gulf-European conference on energy security. This happened in a meeting on the sidelines of the Brussels Ninth Conference on Syria, which focused on helping ensure the success of the post-Assad transition.
On the geopolitical front, too, key European nations, including France, Germany, Italy, and the UK, are engaging in the Arab plan to rebuild Gaza. These nations are among the key proponents of a renewed ceasefire leading to a sustainable, fair plan for peace.
Europe is concerned by how much political instability has grown in the Middle East in recent times, with the conflict in Gaza spreading to other areas, including Lebanon. While economic relations with Europe have been largely unaffected so far, this will not inevitably be the case in the future.
These discussions build from recent EU-Arab summits, organized in cooperation with the Arab League and European Parliament, to identify and promote common interests and values collectively — specifically, singling out key priority areas for cooperation, taking into account regional and global challenges.
Yet, it is the GCC economic agenda that is perhaps the most prominent in the Europe-Middle East dialogue at present. Not only is a Gulf-European conference on energy security being explored, there is also new impetus for a GCC-EU trade agreement to be agreed during Ursula von der Leyen’s second term as European Commission president in the period till late 2029.
This is a key part of the EU’s plans to engage key emerging market powers much more, following the election of Donald Trump to the US presidency, and also Russia’s invasion of Ukraine. In recent weeks, von der Leyen has agreed a trade deal with the Mercosur bloc, including Brazil and Argentina, in South America; kick-started trade talks in India; and visited South Africa, the host of this year’s G20 summit.
The GCC, with its headquarters in Riyadh, is another top economic target. The bloc — Saudi Arabia, the UAE, Bahrain, Oman, Qatar, and Kuwait — is a major source of global economic activity with total economic output of around $2 trillion in 2022. According to the World Bank, if the GCC continues to grow at a “business as usual” rate, combined GDP will grow to a projected $6 trillion by 2050.
One of the big prizes for the EU of a GCC deal could be further, open access to investment from Gulf sovereign wealth funds. These tend to be cross-sector investors that often take a long-term, multi-decade economic perspective.

Energy security and geopolitics are likely to remain at the heart of current Europe-GCC dialogues.

Andrew Hammond

The EU is the second-largest trade partner for the GCC countries, generating €170 billion ($185 billion) in trade in 2023. Much of this exchange is related to natural resources.
In 2023, imports of mineral fuels accounted for over 75 percent of EU imports from GCC countries. Moreover, since 2020, fuel imports have more than tripled, in large part due to a sharp shift in the EU’s supply sources caused by Russia’s invasion.
According to the European Council on Foreign Relations think tank, of more than 180 new energy agreements agreed by the EU since the Ukraine war began, the GCC is the region that has signed the largest number of deals. Well over one-fifth of such agreements have been inked with the UAE (24 deals) leading the way, alongside Qatar (11), Saudi Arabia (four), Oman (two), and Bahrain (one).
At present, EU-GCC relations are based on a cooperation agreement signed in 1989 that established regular dialogue on topics including economic relations, climate change, energy, and the environment. However, the EU would like a trade deal and, in 2022, Luigi Di Maio, the former Italian foreign affairs minister, was appointed as the first ever EU Special Representative for the Gulf to try to develop a stronger, comprehensive, and more strategic partnership.
In 2023, the EU ramped up efforts to try to revitalize EU-GCC negotiations for a trade agreement. The GCC has signed relatively few such agreements to date, including a pact with South Korea in 2023, more than 15 years after talks began.
The GCC also entered into trade talks with the UK in 2022, and Prime Minister Keir Starmer visited Saudi Arabia and the UAE last December. Total bilateral trade is worth about £59 billion, making the GCC bloc as a whole equivalent to the UK’s fourth-largest non-EU export market behind the US, China, and Switzerland.
It is possible that wider developments could reinforce this dynamic of closer GCC-Europe economic cooperation. This includes potential steps toward implementation of a proposed India-Middle East-Europe corridor to foster connectivity and integration with Asia via a proposed route from India through the UAE, Saudi Arabia and into Greece.
The corridor concept, which would comprise vast road, railroad, and shipping networks, was given new impetus in September 2023 at the G20 summit in New Delhi. A memorandum of understanding was signed to try to develop the project by the governments of India, the US, UAE, Saudi Arabia, France, Germany, Italy, and the 27-member EU bloc.
Taken together, energy security and geopolitics are likely to remain at the heart of current Europe-GCC dialogues. These would be boosted significantly if trade deals are agreed in the second half of the 2020s with the Starmer and von der Leyen administrations.

• Andrew Hammond is an associate at LSE IDEAS at the London School of Economics.