Gulf States Hold Closed-Door Talks in Berlin to Change ‘Image’ of Iran Relations

Abu Dhabi Crown Prince Sheikh Mohamed bin Zayed Al Nahyan meets with German Chancellor Angela Merkel earlier this month. (WAM)
Abu Dhabi Crown Prince Sheikh Mohamed bin Zayed Al Nahyan meets with German Chancellor Angela Merkel earlier this month. (WAM)
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Gulf States Hold Closed-Door Talks in Berlin to Change ‘Image’ of Iran Relations

Abu Dhabi Crown Prince Sheikh Mohamed bin Zayed Al Nahyan meets with German Chancellor Angela Merkel earlier this month. (WAM)
Abu Dhabi Crown Prince Sheikh Mohamed bin Zayed Al Nahyan meets with German Chancellor Angela Merkel earlier this month. (WAM)

Gulf countries apprehensively approach Germany given its seemingly close political ties with Iran and its somewhat “lenient” approach towards its regime. Efforts have been increasing in Berlin to change this image among Gulf countries. To that end, a forum, described as the first of its kind, was held in the German capital to discuss the ties with the Gulf. The meeting brought together decision-makers from the Gulf and Germany to hold frank, rather than diplomatic, talks.

The two-day meeting was organized by the Federal Academy for Security Policy and the German-Arab Friendship Association and held away from the media spotlight. Iran took center stage at the discussions given recent tensions in the Gulf. The situation in each of Yemen, Syria and Iraq were also covered. Gulf officials did not hesitate in blaming Iran for stoking tensions, while also accusing Germany of failing to play a bigger role in easing them. They also spoke of “economic interests” binding Berlin to Tehran that was limiting Germany’s political policy.

German officials at the talks, however were keen to underline that Berlin and Tehran did not enjoy a “special” relationship. German officials included figures from the defense and foreign ministries and lawmakers. They stressed that economic relations do not dictate Germany’s behavior.

Accusations of “special” relations between Germany and Iran are not unfounded and date back to several decades and continued even after the 1979 revolution. In 1984, then German Foreign Minister Hans-Dietrich Genscher visited Tehran, becoming the first European official to do so since the revolution. Since then, Germany became a main trade partner to Iran. In 2014, it was estimated that German exports to Iran exceeded more than 3.5 billion euros.

After the 2015 nuclear deal, this exchange increased even further. German Economy Minister Sigmar Gabriel was among the first European officials to visit Tehran after the deal was signed. In 2015, the trade exchange between the two countries reached 2.5 billion euros and these numbers increased in early 2016. They have, however, started to steadily decline after the US withdrew from the nuclear accord in May 2018.

Despite this, Germany remains one of the greatest defenders of the nuclear pact and it was among the European countries that reaped the most benefits from it, which explains why Berlin is working tirelessly to salvage it, prompting accusations that its relations with Tehran were dictated by its economic interests.

Officials at the forum refuted these claims, saying that their country was seeking to prevent Iran from developing nuclear weapons, which would lead to an arms race in the region. They said that the 2015 pact was the best solution to the situation, reiterating their opposition to Washington’s withdrawal from the deal.

MP Johann David Wadephul told Asharq Al-Awsat that disputes between Germany and the Gulf were not a big as they are being portrayed. He pointed out that two sides are in agreement that Iran should not acquire nuclear arms, but they had differences over how to implement this. They were also in agreement that Iran’s policies in the Middle East were aggressive and hostile, which is a danger to peace in the region. On whether Germany and Iran enjoy special relations, he said: “We do not share any strategic values or goals with Iran.”

Moreover, Wadephul said that after the US withdrawal from the nuclear deal, many opportunities were available to reach a common strategy on Iran. “We must seize the opportunity to draft a new pact because the old agreement is over.”

“This will give us a chance to reach a comprehensive deal that covers all of Iran’s policies, including its hostile behavior that allows it to make gains in Syria and other areas,” he remarked.

In addition, he said that economic ties were not dictating relations between Berlin and Tehran. “We do not have an important economic relationship with Iran. We have very important economic ties with the Gulf states, especially Saudi Arabia,” he stressed.

According to the German Foreign Ministry, Saudi Arabia and the United Arab Emirates are Berlin’s two greatest trade partners in the region. In 2017, German imports to the Kingdom exceeded 6.5 billion euros.

Relations between Riyadh and Berlin have returned to normal after previous tensions that saw the Kingdom withdraw its ambassador in 2017 over the then German foreign minister’s accusation that Saudi Arabia was behind the resignation of Lebanese Prime Minister Saad Hariri from his post. Relations went back on track after current Foreign Minister Heiko Maas offered a public apology during a joint press conference with then Saudi Foreign Minister Adel al-Jubeir on the sidelines of the United Nations General Assembly.

Saudi Arabia has since then appointed a new ambassador, Prince Faisal bin Farhan al-Saud, who was born in Germany.

The envoy took part in the opening of the Berlin forum. He told Asharq Al-Awsat that since assuming his post earlier this year, he sensed “great interest” from Germany in relations with Saudi Arabia and the important role it plays. He echoed Wadephul’s comments that Germany was not close to Iran.

“I think they realize that the greatest source of instability in the region is currently Iran,” he stated.

Indeed, the side discussions at the forum focused on Yemen and Tehran’s role there. The Gulf participants said that Tehran is the main backer of the Houthi militias and it was obstructing the UN-sponsored political dialogue. They urged Germany to exploit its relationship with Iran to pressure the Houthis to accept political dialogue based on international resolutions. They also called on it to “quit playing the role of silent mediator and play an active one.”

Despite German officials’ acknowledgment that Iran was involved in the conflict, they asserted that the Yemenis alone could end the war. They did admit, however, that Tehran has a hand in hindering progress, in contrast to Riyadh and Abu Dhabi’s positive role that facilitated the Stockholm agreement.

Head of the Federal Academy for Security Policy Karl-Heinz Kamp said that the forum served as a platform for Gulf-German talks, acknowledging the problems between the two sides. He hoped that the forum would be held on an annual basis.

“We realize that Iran poses a danger to us too,” he added, saying that Germany’s foreign policy was closest to the Gulf policy.



What Happens When Russian Gas to Europe Via Ukraine Stops?

A view shows a board with the logo of Russian gas producer Gazprom at the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia June 5, 2024. REUTERS/Anton Vaganov/File Photo
A view shows a board with the logo of Russian gas producer Gazprom at the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia June 5, 2024. REUTERS/Anton Vaganov/File Photo
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What Happens When Russian Gas to Europe Via Ukraine Stops?

A view shows a board with the logo of Russian gas producer Gazprom at the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia June 5, 2024. REUTERS/Anton Vaganov/File Photo
A view shows a board with the logo of Russian gas producer Gazprom at the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia June 5, 2024. REUTERS/Anton Vaganov/File Photo

Austria's energy company OMV was informed by Gazprom that the Russian gas producer would halt deliveries of natural gas via Ukraine to OMV from 0500 GMT on Nov. 16 following OMV winning an arbitration case. Supplies of Russian gas to Europe via Ukraine may completely stop from Jan. 1 2025 after the current five-year deal expires as Kyiv has refused to negotiate the new terms of the transit with Moscow during the war.
Here is what happens if Russian gas transit via Ukraine is completely turned off and who will be affected most, according to Reuters.
HOW BIG ARE THE VOLUMES?
Russian gas supplies to Europe via Ukraine are relatively small. Russia shipped about 15 billion cubic meters (bcm) of gas via Ukraine in 2023 - only 8% of peak Russian gas flows to Europe via various routes in 2018-2019.
Russia spent half a century building its European gas market share, which at its peak stood at 35%.
Moscow lost its share to rivals such as Norway, the United States and Qatar since the invasion of Ukraine in 2022, prompting the EU to cut its dependence on Russian gas.
EU gas prices rallied in 2022 to record highs after the loss of Russian supplies. The rally won't be repeated given modest volumes and a small number of customers for the remaining volumes, according to EU officials and traders.
UKRAINIAN ROUTE
The Soviet-era Urengoy-Pomary-Uzhgorod pipeline brings gas from Siberia via the town of Sudzha - now under control of Ukrainian military forces - in Russia's Kursk region. It then flows through Ukraine to Slovakia.
In Slovakia, the gas pipeline splits into branches going to the Czech Republic and Austria.
Austria still receives most of its gas via Ukraine, while Russia accounts for around two-thirds of Hungary's gas imports.
Slovakia takes around 3 bcm from energy giant Gazprom per year, also about two-thirds of its needs.
Czech Republic almost completely cut gas imports from the east last year, but has started taking gas from Russia in 2024.
Most other Russian gas routes to Europe are shut including Yamal-Europe via Belarus and Nord Stream under the Baltic.
The only other operational Russian gas pipeline route to Europe is the Blue Stream and TurkStream to Türkiye under the Black Sea. Türkiye sends some Russian gas volumes onward to Europe including to Hungary.
WHY DOES THE UKRAINIAN ROUTE STILL WORK?
While remaining Russian gas transit volumes are small, the issue remains a dilemma for the EU. Many EU members such as France and Germany have said they would not buy Russian gas anymore but the stance of Slovakia, Hungary and Austria, which have closer ties to Moscow, challenges the EU common approach.
The countries, who still receive Russian gas, argue it is the most economic fuel and also blame neighboring EU countries for imposing high transit fees for alternative supplies.
Ukraine still earns $0.8-$1 billion in transit fees from Russian gas transit. Russia earns over $3 billion on sales via Ukraine based on an average gas price of $200 per 1,000 cubic meters, according to Reuters calculations.
Russia's gas pipeline export monopoly Gazprom plunged to a net loss of $7 billion in 2023, its first annual loss since 1999, because of the loss EU's gas markets.
Russia has said it would be ready to extend the transit deal but Kyiv has repeatedly said it won't do it.
Another option is for Gazprom to supply some of the gas via another route, for example via TurkStream, Bulgaria, Serbia or Hungary. However, capacity via these routes is limited.
The EU and Ukraine have also asked Azerbaijan to facilitate discussions with Russia regarding the gas transit deal, an Azeri presidential advisor told Reuters, who declined to give further details.