The basic premise of this article is that conditions have ripened for an overall settlement of the Cyprus conflict, provided a rational approach prevails in addressing the issues that still remain unresolved. The article first shows that the root of the conflict has been ethno-nationalism and the derivative concept of a nation state. Second, after demonstrating through an historical “flashback” that nationalism has led to a dead-end road in Cyprus, it presents convincing evidence that a steadily increasing number of citizens in both communities of the island are realizing the need to transcend the ethnic division and reach a federal settlement. Finally, based on policies favorable to the exploitation and transportation of hydrocarbon (i.e., the materialization of the Nabucco pipeline strategy), the article, while admitting the complexity of the situation, makes a strong point that natural gas may become a catalyst for a solution in Cyprus. Because, it would benefit all parties involved: Cyprus, Turkey, the EU and other Eastern Mediterranean countries.