How Oct 7 foiled the US' plan to secure Israel's lifeline

Back in 2002, Russia, Iran and India signed the agreement for the International North-South Transport Corridor (INSTC) project.

Other important members are Azerbaijan, Armenia, Kazakhstan and Belarus, although other countries are involved to varying degrees.

INSTC is a 7,200 km long multi-mode network consisting of ship, rail and road for the transport of goods between India, Iran, Azerbaijan, Russia, Central Asia and Europe.

The aim of the corridor is to increase trade connectivity between major cities such as Mumbai, Moscow, Tehran, Baku, Bandar Abbas, Astrakhan, Bandar Anzali and others.

Meanwhile India and Iran have a long-standing agreement, also signed in 2002, to develop Chabahar - Iran's southernmost city and free port (free trade zone) on the coast of the Gulf of Oman - into a fully-fledged deep-sea port.

The port of Bandar Abbas handles 85% of Iran's maritime trade and is heavily congested, while Chabahar has a high capacity, which is to be expanded from the current 2.5 million tonnes to 12.5 million tonnes per year.

In contrast to Bandar Abbas, Chabahar is able to handle cargo ships of more than 100,000 tonnes.

The positioning of INSTC as an alternative to the conventional deep sea route via the Suez Canal is a major advantage, considering the geostrategic and economic diplomacy of all countries involved, especially Iran and Russia, both of which are under US sanctions, as well as the fact that this route is more cost-effective and saves a significant amount of travelling time.

Efforts to expand the INSTC were intensified after Western sanctions forced Moscow to shift its trade flows from Europe to Asia, Africa and the Middle East in the wake of the Ukraine war.

In 2022, the total cargo flow via the INSTC was 14.5 million tonnes and is expected to reach 17.6 million tonnes in 2023. By 2030, the volume is expected to reach 41 million tonnes.

Russia has repeatedly stated that the route could become a substitute for the Suez Canal, the 193-kilometre-long waterway at sea level in Egypt that connects the Mediterranean Sea with the Red Sea.

The popular route between Europe and Asia handles around 12% of global trade every day.

In March 2021, the Suez Canal was blocked for six days by a container ship that ran aground. This blockade costs global trade an estimated US$9 billion per day in losses.

It is expected that trade via INSTC will enable companies to cut shipping costs by about 50% and save up to 20 days compared to the Suez Canal route.

Enter Imec corridor

These developments will make the unilateral sanctions imposed by the USA and the West on Russia and Iran rather ineffective. Therefore, in September 2023, President Joe Biden announced the new US vision for the region, called the India-Middle East-Europe Economic Corridor (Imec).

Imec comprises an Eastern Corridor connecting India to the Gulf region and a Northern Corridor connecting the Gulf region to Europe. It will include a rail and sea-rail transit network as well as road transport routes.

Imec can also be seen as an attempt by the US to forge a global strategic partnership that has the potential to challenge or compete with China’s dominance of the Eurasian landmass through its Belt and Road Initiative (BRI), which has been a decade in the making.

More importantly, the Imec façade also masks an attempt by the US to reshape the region's security and trade architecture in order to secure control over trade routes and the stability of its military supply lines in the region.

A key component of Imec is the rail link that will connect the UAE with Saudi Arabia and terminate at Port Haifa in Israel. From there, it will be connected by sea to Bahrain and Oman. It will then be connected to Europe via a railway line.

The lack of formal relations between Saudi Arabia and Israel is currently the only missing link in Imec. Biden is trying to get Saudi Arabia and Israel on the same page.

Imec will thus promote connectivity between Israel and its neighbours in the areas of transport, infrastructure and information, improve global trade in the Middle East and also strengthen Israel’s position as a hub for the transport of goods from the Far East to the West.

Against the backdrop of this strengthened role of Israel in Imec, Benjamin Netanyahu – just a few days before the Hamas attack on Israel on Oct 7 – presented a map to the United Nations depicting a newly emerging Middle East without Gaza and the West Bank.

An earlier rival regional trade arrangement called the Iraq Development Road (IDR) was announced in May 2023. It aims to connect Asia with Europe by building a network of railways, roads, ports and cities.
It will connect the port of Grand Faw in southern Iraq to the Turkish border and extend further into Europe, with Iran and Turkey serving as alternative hubs to Israel.

Thus, before Hamas' Oct 7 operation, numerous significant global trade projects were announced, all competing for access and aiming to leverage their respective countries' geopolitical advantages to become key hubs in the global supply chain.

The Hamas operation, the ensuing fighting and its continued ability to attack Israeli ports and cities with drones and missiles have signalled to regional players that Israel may not be able to play an active role in Imec in the short to medium term.

The US has attempted to use the war in Gaza as a means to consolidate Imec by brokering an agreement to normalise relations between Saudi Arabia and Israel – a key requirement for the success of Imec – in exchange for a ceasefire in Gaza.

However, Israel’s intransigent refusal to agree to a ceasefire in Gaza has frustrated US efforts to broker a ceasefire and ultimately normalise relations between Israel and Saudi Arabia, much to the annoyance of the US.

The Gaza war significantly altered global supply lines, especially after Yemen decided to impose a naval blockade, first on Israel and later on the US and the UK.

The maritime blockade was announced by Yemen’s Ansar Allah government as a means of pressure to end the genocide in Gaza.

Following the blockade, Ansar Allah stated that it was co-operating with BRICS countries and had reached an agreement on their efforts. This indicates that Russia and China are supporting Yemen in becoming a regional naval power to undermine the supply lines of the US and its regional military and trade allies.

These attacks have used advanced means such as hypersonic missiles and aerial and underwater drones, resulting in a significant drop in shipping traffic through the Suez Canal, which could indicate the involvement of the major powers in arming Yemen.

In May, Israel announced its plan to integrate the Gaza Strip into Imec and turn it into a centre for the production of Saudi electric vehicles and the export of minerals around the world.

As part of this new plan, Israel took control of Gaza's only border crossing with Egypt at Rafah to make the Strip completely dependent on Israel for imports, exports and travelling.

Israel centres the resolution of the Gaza conflict on forming an alliance of Arab countries to administer it after the removal of Hamas, commonly known as the “day after” plan, in an attempt to realign the region and link its future to the incorporation of Gaza Imec, and ending the possibility of Palestinian statehood.

Hamas still hopes to win the war and use this victory as a gateway to re-legitimise the Imec and its potential to become a regional trade hub.

Today, the future of the Gaza war is intertwined with the future of the region and the world. The genocide is now about redefining global supply lines, not just about establishing a Greater Israel.

Israel has legitimised its actions in Gaza as part of a long-term effort to eliminate Hamas and secure the future of Imec, indicating that it is not interested in ending the genocide anytime soon.

For Hamas and the Palestinians, ending the war is no longer possible without aligning themselves with global actors such as Russia, China and the "axis of resistance", who are trying to redefine their involvement in the conflict to prevent Imec's success.

China has an interest in ensuring that Gaza does not lose the war and that the blockade against US and British ships is maintained, which would undermine their ability to intervene in a potential conflict in Taiwan provoked by the US.

For Russia, access to Syrian ports and the security of neighbouring Lebanese ports are crucial.

Therefore, Hamas and the Palestinians need to strengthen relations with Russia and emphasise the regional and global nature of the war.

The Chinese initiative challenges the US and Israeli plans for Gaza and Imec and offers an alternative in which the Palestinians retain their statehood and independence, possibly including a greater role for China in the reconstruction of Gaza and the possible establishment of a Chinese-run port there.

Ultimately, the consequences of the conflict in Gaza will be directly linked to the future of the region and world trade, so a regional military escalation is to be expected and the war is likely to continue for many years to come.

Jamari Mohtar is editor of Let’s Talk!, an e-newsletter on current affairs.

The views expressed in this article are those of the author(s) and do not necessarily reflect the position of MalaysiaNow.