Washington has proposed investing $5 billion to seed a fund for rebuilding Gulf energy sites Iranian strikes have battered over seven months. Bahrain and seven other regional partners would receive invitations to add equal contributions and lift the total to $10 billion. Iran’s closure of the Strait of Hormuz in February rattled Europe, where the war in Ukraine had already upended energy habits. Bahrain is charting its own course through the European Chamber of Commerce, and American capital paired with European customers may prove the sturdiest foundation for Gulf recovery.
EuroCham began operations in Manama last week, and German Ambassador Henning Simon announced the formal launch ceremony for next month. Its own commercial registration gives the chamber independence from diplomatic missions, and its ambitions cover the wider Gulf Cooperation Council market, where Bahrain currently holds the presidency.
Simon described the mission, “The initiative is aimed at attracting European companies not only to trade with GCC countries, but also to drive mutual investment,” and he pointed to around 40 German firms already operating in Bahrain.
Seven non-resident ambassadors from the European Union recently met Noor Al Khulaif, chief executive of the Bahrain Economic Development Board. Workforce development, industrial growth and joint ventures topped their agenda, which gives the chamber official goodwill to draw on.
Wars Rewrote Europe’s Energy Habits
European energy buyers give such introductions their urgency. European Central Bank economists compared the energy shocks of the wars in Ukraine and Iran and found the Iranian disruption larger in volume, with price rises so far comparatively muted. The closure interrupted transit of around 20 million barrels a day, and Saudi and Emirati pipeline networks have softened the blow, leaving an average loss near 14 million barrels.
The losses explain the appeal of export routes bypassing Hormuz, which the American fund would finance. Europe, scarred by the loss of Russian pipeline flows, wants trustworthy Gulf partners in place before the next disruption. Even rebuilt pipelines earn revenue only after refiners and traders in Rotterdam or Hamburg commit to long contracts, and such commitments grow out of relationships established well before the first barrel flows.
Reconstruction Before Peace Invites Risk
Gulf officials caution that rebuilding during active hostilities risks handing Iran new targets. Most invited contributors host American military bases and have seen their energy infrastructure draw Iranian strikes, so early pledges commit capital to sites a resumed round of strikes could destroy again. The White House has made no announcement, and the plan stays an unconfirmed press report.
Commercial groundwork with European partners can begin under present conditions, as Italy’s recent Gulf diplomacy proves. Prime Minister Giorgia Meloni attended the Manama summit last year, where leaders agreed to raise Italy’s interaction with the GCC to strategic partnership status. Italy has signed a clean energy deal with Albania and the UAE, which positions Rome as a conduit between Gulf producers and European buyers.
Chambers Before Grand Bargains
Brussels backs this course officially. In July the EU and Bahrain launched negotiations on the Strategic Partnership Agreement, and Kaja Kallas, the EU’s foreign policy chief, said, “At a time of great instability in the region, partnerships matter more than ever.”
The larger free trade agreement between the EU and the GCC has been under negotiation since 1990, and Simon tempers hopes for next month’s summit in Riyadh. In his words, “It probably will not be signed in Riyadh”.
The American fund carries a precondition it cannot meet on its own, a ceasefire. Insurers and builders hesitate over sites still within missile range. Commercial groundwork with European partners meets no such obstacle, so EuroCham can gather introductions, joint ventures and supplier lists while pipeline construction remains unsafe.
Keep up with Daily Euro Times for more updates
Read also:
Bahrain’s Economic Reforms: On Pause For Now
Iran and Ukraine’s Wars Are Converging
Private Capital Steps Up as Gulf Water Risks MountÂ
