According to a study conducted by the Institute for German Economics (IW), the European Union should strengthen its trade links with the Gulf states, such as Saudi Arabia and the United Arab Emirates. The study notes that these nations are actively diversifying their trade partners. Conversely, the EU’s position in the region has diminished significantly. For instance, the EU’s share of the Gulf states’ imports dropped from 26% in 2004 to just 18% in 2024.
The decline of these trading relationships presents both a challenge and an opportunity. According to study author Simon Gerards Iglesias, the ongoing conflict necessitates substantial medium-term repairs to the energy infrastructure, a sector from which German mechanical and plant engineering companies could benefit.
Consequently, the IW advises that the EU urgently needs to finalize a comprehensive trade agreement with the Gulf countries. While Germany has historically focused its exports to the region on cars, medicines, and machinery, a new partnership could introduce valuable imports-such as low-carbon steel or hydrogen-at prices that would be unattainable through purely domestic production.