With Iran’s closure of the Strait of Hormuz roiling energy markets, other countries in the region may begin to pursue alternative routes to transport energy and other goods, but they are far from ready to be put into use, experts told Jewish Insider this week. 

One of the highest-profile routes is the India-Middle East-Europe Corridor (IMEC), proposed by the Biden administration in September 2023 as a route for trade, energy and more; it would go from India, through Saudi Arabia, the UAE, Jordan and Israel, then across the Mediterranean to Europe through Greece.

While Iran has threatened to block the Strait of Hormuz and obstruct oil shipping for decades, the Islamic Republic was not the main reason for considering another route of transportation — it was initially conceived as an alternative to China’s Belt and Road Initiative.  

But now that the Iranian threat has been realized, IMEC and other alternative routes to ship oil and gas from the Gulf are back in focus.

Gabriel Mitchell, an expert on energy security and a visiting fellow at the German Marshall Fund, told JI that “the threat and challenge posed with the Strait of Hormuz has raised questions about East-West shipping, traffic and global energy trade to the maximum.”

”If you look at it from the perspective of India on one end, Europe on the other and anywhere in between, they are thinking they need to create as much redundancy as possible for commercial shipping for their own economic security,” Mitchell said. “It doesn’t make a difference whether you’re Emirati or Qatari or just an international shipping company with a base of operations in [the UAE’s Port of] Fuajirah, you’re asking the same questions.” 

Mitchell said the idea of redundant shipping routes initially came from a desire to lower costs and increase speed of delivery, and grew more popular due to challenges with the Suez Canal during the COVID-19 pandemic. Now, in light of Iran’s obstruction of the Strait of Hormuz, “the argument in favor of IMEC [and] creation of redundancy has increased significantly.” 

Increased regional connectivity can “take away Iran’s lever of closing the Strait of Hormuz,” Joseph Rozen, a senior fellow at the Misgav Institute for National Security and the former director for Asia-Pacific in Israel’s National Security Council, told JI. (The writer is a senior fellow at the Misgav Institute.)

Rozen said that “IMEC is a buzzword; the focus needs to be on inter-regional connectivity,” and noted that the Trump administration may be hesitant to adopt a Biden-era initiative, though it seemingly supports increasing connectivity more broadly through the Board of Peace. 

Regional connectivity can increase stability and growth, Rozen said, and more countries can be brought in than those initially on board, such as Oman, Iraq, Syria, Egypt and even Gaza.

“The Iran war increased American involvement and its push for connectivity initiatives,” Rozen said. “Before the war [President Donald] Trump expressed interest, but now, the U.S. is more invested, and that encourages countries in the region to invest in regional connectivity if they know there’s an American security umbrella … over their investments and development.”

Rozen argued that existing infrastructure should be improved in the short term. The Saudi and Emirati pipelines combined can only transfer about 8.5 million barrels’ worth of oil per day, 42% of what passed through the Strait of Hormuz each day before the current war with Iran, he said. Another short-term move Rozen proposed is to continue to grant countries waivers to buy Russian gas, though this effort has seen resistance from members of Congress.

Mitchell said that IMEC faced a lot of skepticism when it was proposed, and none of its challenges have been resolved.

The commercial viability of alternative pipelines and routes is in question, Mitchell said: “Who is going to pay? Who is going to secure it? Which available ports will be able to manage that intake?”

Companies may prefer to try to find quick fixes rather than make multibillion-dollar investments that take a decade or more to bring returns, Mitchell argued, and the private sector and states will have to work together to make them viable. “I believe that will tip the scales in favor of these kinds of projects, but which end up getting green lit is yet to be determined.”

Some of the geopolitical challenges have grown more difficult since the Oct. 7, 2023, Hamas attacks on Israel, weeks after IMEC was announced. In addition, Mitchell pointed out that Turkey has obstructed joint energy projects between Israel, Greece and Cyprus in the past decade, demanding to be involved, and would likely do the same with IMEC.

”It’s hard to get everyone involved in one project … It’s hard to say how we are going to set aside our differences for these sets of initiatives … [and] what combination of carrots and sticks will convince people to pursue diversification. … I think in the end the answer will be yes, but it will take time to get there,” Mitchell said.

When Indian Prime Minister Narendra Modi visited Israel earlier this year, IMEC was part of the public conversation, but diplomats from both countries told JI on condition of anonymity that Saudi Arabia was hesitant to proceed because of Israel’s involvement — even though both countries were part of the plan from its inception.

Rozen said that Riyadh and Jerusalem can be part of the same project as long as the focus is on practical steps that serve the Saudis’ interests and not summits and bombastic statements that would “do more harm than good.”

”I understand their interest to maintain a certain kind of rhetoric, but there are other interests,” he said. “The more we advance through channels that are not political and are lower profile … I think the Saudis would be willing to do it. It can happen at any level of IMEC or other connectivity plans, in energy, trade and digital services. Cooperation led by the business sector would not carry the same political baggage … and under the current political circumstances it may be better for it not to be government-led.”

Mitchell also said that disputes between Saudi Arabia and the UAE that surfaced late last year could get in the way of developing IMEC, though in “a situation like now, when everyone is economically bleeding, there should be room for creative solutions.”

Israeli officials have made many positive statements about IMEC and Israeli Foreign Minister Gideon Sa’ar took part in a summit last year with his counterparts from involved countries, but no progress has been made on the ground.

Rozen said that Israel will likely wait to develop the necessary infrastructure “as long as there is no commitment from Arab States, such as Jordan, to invest on their side.” However, he added that, in the interim, Israel can “focus on the technological aspects” of regional connectivity at a lower cost.

Mitchell said the big challenge for Israel is that other countries will be competing to be involved in connectivity projects. Egypt, he said, has been pushing to be the gateway to the Mediterranean, with support from France.

”The argument in Israel’s favor is the security-related coordination [with Arab states] that is happening informally in a lot of ways. We need to concretize that,” he said. “One would assume that Israeli companies would have the opportunity to present their offerings for cybersecurity infrastructure.”

”The real thorn in Israel’s side since Oct. 7 is the diplomatic element. Can Israel manifest any kind of diplomatic initiative or momentum to patch together meaningful cooperation?” Mitchell questioned. “It seems that as of right now, nobody is willing to meet in the middle, which is challenging if you’re Israel, but it’s also challenging for the U.S., which is trying to work with everybody in parallel and has struggled to bring them around the table [together].”