The war of the United States and Israel against Iran has not only destabilized the Middle East: it has driven up oil and gas prices, and is damaging the global economy. Moreover, it has left the allies and rivals of the US uncertain about how to react to the behavior of an unpredictable and unreliable superpower, triggering a historic geopolitical realignment that will transform the balance of power in the world over the next decade.
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Of course, the effects of the war are felt most immediately and deeply in the region where it is being fought. The war has fully convinced many Arab states that the Gulf Cooperation Council (GCC)—an informal diplomatic, economic, and security agreement long troubled by internal disputes—no longer functions well. For the United Arab Emirates—which on April 28 announced its intention to leave OPEC after nearly six decades—the war is intensifying rivalry with the Saudis. From now on, the UAE will have a closer relationship with Israel in intelligence, technology, and security, hoping to weaken the Tehran regime. Meanwhile, Saudi Arabia wants to strengthen military ties with Pakistan—a nuclear power—Egypt, and Turkey, and collaborate better with China, seeking ways to coexist peacefully with the Islamic Republic. Both blocs want to maintain close security ties with the US, but we will see much less coordination in decision-making across the Middle East. This is the most immediate and striking regional consequence of the war.
At the same time, the deterioration of transatlantic relations must be taken into account. In the midst of Russia’s war against Ukraine and the anxiety it causes throughout Europe, the Trump administration’s decision to focus the superpower’s attention on Iran to declare war—and then bitterly criticize European leaders for not helping—has given new momentum to the attempt to build a European collective defense outside NATO and US leadership. It is unlikely that Trump will seriously try to withdraw his country from the Alliance, and if he changed his mind, legally the US Senate could prevent it. But the announcement he made on May 1 that, in the next 12 months, the US will withdraw 5,000 of the 36,000 troops stationed in Germany, just days after German Chancellor Friedrich Merz’s criticisms about the war with Iran, has further raised alarms across the continent. Additionally, Trump has ignored European objections to the idea of suspending some sanctions against Russia. The result is increasing fragmentation within the Western alliance and growing European fears that the White House will take decisive steps toward signing a security agreement with Russia. That same prospect fuels Putin’s hopes that prolonging the war in Ukraine, despite the Russian army being bogged down on the battlefield today, could lead to victory as NATO disintegrates.
In Asia, the effective closure of the Strait of Hormuz is severely harming the economies of US allies. Just as with the historical partners of the North American power in Europe, these Asian countries have no certainty about the Trump administration’s commitment in economic and security matters. The problem is that Japan, South Korea, and Taiwan, among others, have fewer alternatives to the alliance with the US than Germany, France, and the United Kingdom. There is no Asian NATO linking them to Washington nor an internal cooperation institution like the EU. Moreover, they face pressures created by China’s growing economic, technological, and military power. So far, the latter has already begun to show more aggression against the DPP government in Taiwan and the LDP government in Japan. All these factors make it more difficult for US Asian allies to follow the Europeans’ example and seek greater independence from Washington.
Finally, there is China itself. Aware that the People’s Republic’s economy will grow more slowly and that Trump’s adventurism in the Middle East and Putin’s in Ukraine have not favored them or their countries, President Xi Jinping has avoided using the current US distractions to take new risks. Instead, Xi is likely to take advantage of Trump’s imminent visit to Beijing and the pomp and circumstance, which will be the greatest ever received by any US president in China, to convince him that he can enhance his credentials as an international peacemaker if he expresses rejection of Taiwan’s independence. In return, Xi may promise large investments to boost the North American economy, including a drastic increase in purchases of US products. That would be a temptation that everyone—even Trump’s closest advisors—doubt the president could resist. US allies in Asia and the rest of the world will be closely watching this matter.
There is another important change related to China that has been accelerated by the US war in the Middle East. The conflict has shown Iranian leaders and the world how easy and cheap it is to close the Strait of Hormuz—of vital strategic importance for oil and gas trade—and has raised alerts about other possible bottlenecks, such as Bab al-Mandab, which separates Yemen from Africa, and even the Strait of Malacca in Southeast Asia. China is already the world leader in sustainable energy, electric vehicles, and batteries, as well as the critical minerals and reprocessing needed to sustain them; and this historic shift toward post-carbon energy production makes Beijing today a much more attractive trading partner for all the world’s major energy importers.
Everyone needs more energy. In the short term, this benefits the US, the world’s largest hydrocarbon producer, and the US dollar. However, in the long term, the vulnerability affecting oil and gas supply, made evident by the turmoil in the Middle East, creates enormous opportunities for China.
In all these aspects, the ongoing war in the Middle East will be the conflict that most alters international alliances and the global balance of power since the end of the Cold War.
