The conflict with Iran, which began in late February 2026, quickly impacted the European Union. In the first eight weeks, the EU's spending on oil and gas increased by 25 billion euros. This, along with worries about aviation fuel shortages, has pushed European leaders to find new ways to power their economies.
The main issue is the Strait of Hormuz, a vital waterway that used to handle about 20% of the world's oil trade. With this route blocked, Western countries are urgently looking for alternatives.
At the G7 summit in France in mid-June, European Commission President Ursula von der Leyen announced progress in finding new routes. She mentioned that "alternative export routes have been created that are more resilient and offer choices." She specifically pointed to the India-Middle-East-Europe Economic Corridor (IMEC) as an example of a developing pathway.
Following a meeting with Indian Prime Minister Narendra Modi, von der Leyen expressed a desire to "join forces for better connectivity by advancing IMEC." This concept is partly inspired by Saudi Arabia's East-West Pipeline, which moves oil to the Red Sea, bypassing the Strait of Hormuz. Saudi Aramco significantly increased its use of this pipeline during the crisis.
Now, G7 nations are exploring ways to fund new infrastructure that completely avoids the Strait of Hormuz. The EU has indicated a willingness to work with Gulf states on these energy projects.
However, the IMEC project faces challenges. It requires cooperation across different regions, including Israel. Israeli Prime Minister Benjamin Netanyahu supports the idea. Yet, Saudi Arabia has stated it will not recognize Israel without progress on Palestinian statehood, a condition Israel rejects. This diplomatic issue makes the full realization of IMEC uncertain.
Despite these tensions, economic ties are growing. India and the EU aim to finalize a trade agreement this year. Prime Minister Modi also discussed cooperation with German Chancellor Friedrich Merz at the G7 summit.
The push for the IMEC is a significant effort to change global energy flows. Europe's energy security may depend on overcoming engineering challenges and navigating complex Middle Eastern diplomacy.