Mehran Haghirian
September 2024
in "Mediterranean Transitions from the Gulf to the Sahel" Edited by Giulia Daga and Pier Paolo Raimondi
Edizioni Nuova Cultura (Istituto Affari Internazionali)
As some of the most significant actors in the global energy markets, the Gulf states – Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates (UAE) – are facing a whole set of new opportunities and challenges in the transition away from fossil fuels towards renewable energy. Oil and gas have been viewed as a shared lifeline for these states, and have been significant factors in framing each country’s relations with the international community. Within this context, Saudi Arabia, the UAE, and Qatar, are spearheading regional efforts in innovation to smoothen the transition away from fossil fuels as well as embracing renewable energy and new industry technologies. The other Gulf Cooperation Council (GCC) states are also not far behind and have made energy security and sustainable economic development the utmost national priority. While Iran is under economic sanctions and Iraq is heavily engaged in the reconstruction of the war-torn country, they too are also pursuing concrete plans for the further development of their petrochemical industries in tandem to expanding renewable energy.
There have been successful instances of cooperation on energy within the Gulf region, albeit unstructured and sporadic, largely thanks to engagements within the Organization of Petroleum Exporting Countries (OPEC), but also the involvement of international players and the importance of the Gulf’s energy reservoirs and waterways to global markets. Even in the midst of the most intense regional conflicts in the past few decades, there has been somewhat of a mutual understanding on the shared benefits of cooperation. But US sanctions on Iran have been the most important barrier to increasing regional integration and cooperation on energy. Even the Europeans have been forced to cancel proposed agreements and arrangements with Tehran when faced with threats of Washington’s secondary sanctions. As such, there have not been any meaningful regional or international cooperation with the inclusion of Iran on energy. Moreover, all countries under consideration have had an inward vision on energy development with limited interest in bilateral or multilateral initiatives, even within the GCC, and the considerations during the current transition phase too have largely lacked regional integration as a topic. But the entire narrative is shifting in the Gulf. Regional players now seek cooperation to lessen regional tensions and the challenges said threats pose to ambitious development agendas.
With the largely positive diplomatic environment in the region since the 2021 Al Ula Summit that ended the intra-GCC rift and the 2023 Beijing Agreement that restored relations between Iran and Saudi Arabia, even closer engagements and partnerships are expected in the energy domain. The reinvigoration of regional dialogue on multilateral cooperation through avenues such as the Baghdad Conference for Cooperation and Partnership, the COP28, and various other reoccurring high-level events within the region, offer the necessary platforms for further discussions on regional energy cooperation.
The United States aside, European and Asian players are heavily invested in the future of energy in the Gulf and their energy needs are more and more deeply intertwined with the Gulf states. The Europeans have moved towards strategic autonomy and reducing energy dependence after Russia’s war in Ukraine, which kickstarted a new European impetus for partnerships with traditional oil and gas producers in the Gulf. The conflict also accelerated the push for collaboration on the new energy industries and renewable energy technologies. At the same time, Asian countries such as China, India, Japan and South Korea have heavily invested in energy partnerships with the Gulf states. Thanks to these partnerships as well as the global interest in and demand for energy, the Gulf region, and by extensions the Red Sea and the Arabian Sea, are set to become international hubs for solar, wind, hydrogen, and even nuclear energy in the foreseeable future.
This chapter looks at some practical areas for regional cooperation on energy in the Gulf and identifies ways in which the Europeans could get involved in supporting initiatives and boosting European interests and influence in the region in the face of rising competition from China and other leading players in Asia.
Photo Credit: Kamran Jebreili/Associated Press/Alamy
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