By Alexandre Calapez
For decades, Europe saw the Arab world through a narrow lens: the oil it bought and the headlines it read. That picture is now badly out of date. From the Gulf to the Maghreb, Arab economies have become serious competitors and, more importantly, partners that Europe cannot afford to overlook.
The region is not a single bloc, and its strengths differ. The UAE, Saudi Arabia and Qatar compete with capital, energy and world-class infrastructure. Morocco and Egypt compete with proximity, a young workforce and fast-growing industrial bases. What they share is a clear ambition: to move beyond raw materials and compete in manufacturing, services and technology.
As a European businessman, my view is simple. Europe is going through a period of tariffs, energy shocks and slower growth, and it needs new partners with long horizons and deep pockets. For Arab companies willing to understand the European market, this is not a difficult moment to enter. It may be the best one in a generation.
Energy: from supplier to partner
This year has been painful for Gulf energy exporters and European buyers alike. With shipping through the Strait of Hormuz largely halted, Qatar exported only 18 LNG cargoes in the first six months of the war, against 509 a year earlier. Europe got through by drawing down its storage, but it learned a hard lesson: it needs reliable energy partners and more than one route to reach them.
That lesson works in the Arab world’s favour. Once the strait is secure, Qatar expects to restore output from its undamaged plants within about two months. No other supplier can replace that scale. European utilities know it, and many will want long-term contracts the moment shipping normalises.
The bigger opportunity, however, is clean energy. Few places on earth have better sun and wind than the Arabian Peninsula and North Africa. Morocco has shortlisted a portfolio of six green hydrogen projects worth around €30 billion, and Emirati and Saudi developers are among the selected consortia. Green ammonia, green steel and renewable electricity produced next door to Europe are exactly what European industry will need to meet its climate targets without losing competitiveness.
Patient capital meets a continent that needs investment
Europe has a well-documented investment gap. The Draghi report estimated that the EU needs an extra €750 to €800 billion a year to modernise its industry, energy and digital infrastructure. European savings alone will not close that gap.
This is where Gulf capital has a natural advantage. Sovereign wealth funds in Abu Dhabi, Riyadh and Doha manage several trillion dollars and think in decades, not quarters. That is precisely the kind of investor Europe needs for ports, grids, data centres, renewable energy and advanced manufacturing, sectors where returns are steady but slow.
The diversification strategies of the region make this partnership even more natural. The UAE’s non-oil foreign trade grew 13% in the first half of 2026, to about $517 billion, despite months of regional conflict. Saudi Arabia’s Vision 2030 is building new industries from tourism to mining. These economies are no longer only selling to Europe. They are learning to build, operate and compete inside it.
Proximity, logistics and the trade deals still to be signed
Geography is the most underrated competitive advantage in business, and the Arab world has plenty of it. Morocco sits a few kilometres from Spain, with Tanger Med among the largest ports in the Mediterranean and a car industry that already supplies European brands. Egypt controls the Suez Canal. Gulf ports and airlines have turned the region into a crossroads between Europe, Asia and Africa.
As European companies move supply chains closer to home after years of shocks, “near-shoring” increasingly means North Africa. Lead times measured in days rather than weeks, shared time zones and competitive labour costs are a powerful combination.
What is missing is the legal framework to match the economic logic. Europe has shown this year that it can close ambitious deals: its agreement with Mercosur has applied provisionally since May, and negotiations with India concluded in January. The talks with the UAE, now past their seventh round, have moved more slowly, partly over Europe’s insistence on including sustainability and labour issues. Both sides should push to finish. My advice to Brussels is to be pragmatic. My advice to Gulf negotiators is that European standards are the entry ticket to 450 million wealthy consumers, and that ticket is worth paying for.
What it takes to win in Europe
Competitiveness is not only about price, energy or capital. Europe is a demanding market, and Arab companies that succeed here will be those that understand its rules before they arrive.
Regulation is a feature, not a bug. Europe’s carbon border adjustment mechanism, sustainability reporting and product standards can look like obstacles. They are also an opportunity. A producer that can prove low-carbon, well-documented supply chains will win contracts that cheaper competitors cannot even bid for. Here, the region’s solar and green hydrogen potential becomes a direct commercial weapon.
Local partners shorten the road. European markets are fragmented by language, law and business culture. Joint ventures, acquisitions of established firms and partnerships with local distributors are often faster than building from scratch.
Trust is built over time. Some European buyers and insurers today see the region through the lens of this year’s conflict. The best answer is not to argue, but to show resilience in practice: diversified routes, transparent governance and long-term commitments. Patience is a virtue Gulf investors already have in abundance, and in Europe it pays.
Why start in Portugal
Let me end with a suggestion from my own country. For Arab companies looking for a door into Europe, Portugal deserves a close look.
We sit on Europe’s Atlantic edge, a short flight from Casablanca and a direct route from the Gulf. The deep-water port of Sines connects Europe to the Atlantic and Mediterranean shipping lanes. Our electricity is among the most renewable in Europe, our workforce is skilled and multilingual, and our costs remain competitive by Western European standards. The Bank of Portugal expects the economy to grow 2.3% this year, faster than the euro area.
Portugal also offers something few European countries can: a natural bridge to the Portuguese-speaking world, from Brazil, the largest economy in Mercosur, to Angola and Mozambique. A company established in Lisbon or Porto gains access not only to the European single market but to a network of more than 250 million Portuguese speakers.
Europe and the Arab world have traded with each other for centuries. Today, both face the same storms: war, tariffs and an energy system in transition. The partners who come out stronger will be those who stop seeing each other as customers and suppliers, and start building together. The door is open. This is the moment to walk through it.
The views expressed in this article are the author’s own.